Rental Rules

Our Association (12 single family residences) recently implemented the following rental rules for our subdivision due to 4 houses which have become rentals. The owners of 2 of these homes refuse to follow the new rental rules even though they were furnished the new rules months before they rented their homes to new tenants. Specifically they do not want to provide the association with a copy of the criminal background check or the lease agreement "due to sensitive information". This information is only going to go to the management company file and not be public knowledge to everyone in the subdivsion. I believe they are being unreasonable and was wondering what your advice would be?

Here is a copy of our rules:

RENTAL RULES FOR THE **** HOA

The Officers/Board of Directors sets high standards for the Association's appearance in the ***** Homeowners Association ("Association").

The goals for the appearance of the properties in the subdivision are for well
maintained homes and common areas and to implement regulations to secure a crime free neighborhood for families and their guests. Residents in the Association take pride in their community. Customarily, investment properties are less attended to than owner occupied homes. Tenants do not always share the communities high standards created to improve and protect property values. In an effort to maintain these standards, the Officers/Board of Directors has implemented the following rules for rental properties.

Owners as well as their Tenants shall comply with all the Association's rules and other Community Documents. The Association shall impose monetary penalties assessed against the Owner's property for violations of the Rules and the Community Documents.

Compliance with these Rental Rules and Community Documents is a vital part of the Association's success as a crime free neighborhood. Each Owner who rents their property within the Association must comply with the Rental Rules and assist in our goal of a crime free neighborhood. The Association seeks everyone's cooperation in making the community a desirable place to live.

1. To help Owners make the right decision regarding their rental applicants, all Owners are required to conduct a criminal background check on their applicants.

2. The Owner shall notify the Officers/Board of Directors ("Board") in writing within five (5) days of the effective date of executing or renewing a lease.

3. The Owner shall furnish the Officers/Board with a copy of the signed lease and any renewals or revisions along with a copy of the results of the criminal background check within fifteen (15) days of signing the lease, renewal or revision.

4. Written leases are required.

5. All leases must restrict occupancy to no more than three unrelated persons or a single family.

6. The Owner shall furnish the Officers/Board with a written letter certifying that the Owner has furnished the tenant with copies of the Community Documents; that the tenant has agreed to be bound by the Community
Documents; and that the Owner accepts responsibility for the tenants' violations of the Community Documents. The Community Documents consist of the CC&Rs, Rules and Architectural Guidelines and any other rules as implemented by the Officers/Board.

Effective March 28, 2010

By:________________________
President,***** HOA

By:________________________
VP, *******HOA

There were no rental rules in place at all except for the CC&R's which state: "the subdivision and residences being constructed are primarly intended for owner occupants. This is not to be construed as a prohibition on a rental of residence but a reminder to the owners that there are strict maintenance requirements whether owner occupied or not."

Also while you require the results of the criminal background check be turned over; what if they don't have one? I see no rule "requiring" one. As Michele pointed out it is poorly written; did you have it reviewed at all by the HOA attorney to make sure it doesn't violate Washington's landlord - tenant law. And the big one at least to me you left out is term of lease. I would expect you to require a minimum of six months to a year.

That's just it, Glen.

I don't think this board may have had any right whatsoever to enact "rental" rules.

And were I one of the owners who was renting out the property, I would ignore them too.

That's why I asked about the "old" rules.

There were none.

The only mention in the CC&Rs actually says that rentals are not prohibited and the only other comment it makes is that owners are responsible.

I would love to see the section in the CC&Rs that allows the board to create any rental rules.

Since rentals can't be restricted (per the controlling documents), I don't think the board has the authority to tell the owners what they have to do in terms of any rental agreements, background checks, etc.

I don't think the owners renting their properties out are being unreasonable at all.

I think the board would have a difficult time trying to enforce this rule.

My guess is in order to do so (create and enforce the rule), that the entire membership would have to vote on it.

My advice would be to go back to square one and try to pass a legitimate amendment to your documents that allows the board to address rentals.

I will give a word of warning, though. In many single-family detached home developments, it's nearly impossible to create rental restrictions after the fact (through amendments, etc) because of the nature of the owners' rights in relation to renting/leasing investment properties.

This isn't an amendment that would restricting parking or whether you can (or can't) have an above-ground pool.

It might be in your board's best interests to run this whole thing by a well-versed HOA attorney.

It's a good thing you did because I'm not sure your documents allow you to make amendments (which this "rental rules" documents would require) with a simple majority at a meeting.

Most association documents require a majority percentage of some kind (sometimes up to 75% or more) of all members eligible to vote.

And in the case where the ability for the homeowner to rent or lease his/her unit, sometimes that will require 100% (depending on the judge to whom the case goes when challenged).