Rentals

Our builder is the HOA president and has two family members on the board. Myself and one other owner are on the board (and we are the majority). He has 3 votes and we have 2.

When our development is complete there will be 40 townhomes. Building started in 2005.

The builder currently is renting 8 units that he owns. He is selling the model (which is not a good sign because there are 12 homes to build). He changed the style of the townhomes to a smaller version for over 100,00 less in price. 19 owners have purchased.
We are now listed on the the builders website as a "rental community".

The owners meet quarterly and we all know one another.We are certain that he is going to continue building and rent. He is in the process of building 4 more homes. If it continues there will be over 50 percent rentals. He will remain in control of our development until 75 percent are sold other than to the declarant. That will be a long time coming with the economy and with the amount of homes he owns and rents. He has renewed everyone's lease (except for one tenant) who had several people living in the home.

Isn't this a conflict of interest??? Is there anything the owners can do to limit the amount of rentals? (even though we are in the minority). Should we be seeking legal advice?

We paid over 350,000 for our homes and our taxes are the highest in our area as well as our monthly maintenance fee. It's cheaper to rent from the builder!!! The monthly fees he is charging for rent are $600.00 below comparable rents in our area for townhomes.

Any advice on this would be appreciated.

Maureen,

Ouch… You know, I am reading that a lot of condo buildings have the same problems. The unsold condo units are being converted to rental units. I’d consult with a good property attorney to see if he can find ‘a loop-hole’ in your covenants and if the rentals can be restricted.