Rental Restriction Amendment - Hardship clause

We are a small association <20 in California. We are considering a rental restriction mostly to preserve property value.

I have read the excellent article LEASE/RENTAL LIMITATIONS AMENDMENTS - ARE THEY LEGAL IN CALIFORNIA? at the Californiacondoguru.com

The author recommends a Hardship Clause in a rental restriction. I think this is a good idea.

Please correct me if I am wrong: Let's say we have a rental restriction in our CC&Rs but it does NOT have a hardship clause. If someone decides to rent their unit and that unit exceeds the rental restriction limit, if the HOA board does not enforce the limit does that set a precedent of the board approving the breaking of the rental restriction? And by setting that precedent would that allow that owner and other owners to do the same? Is that a legal concept, that allowing a rule to be broken - not enforcing rules - negates them?

If that is the case it seems alternatively a CC&R written with a hardship clause and if the hardship clause is invoked sometimes could be very valuable. It seems it is just as important for protecting the board and the integrity of the CC&Rs as it is for providing some leeway for the owners in case of hardship. It would seem to me to be a "must have".

I make this distinction because we have asked an attorney to draft up an amendment and that attorney that we have picked out doesn't have this clause in his first draft. If this hardship clause is important than the lack thereof might mean we have the wrong guy doing the job.

I think your point is that because the hardship clause might be open to interpretation it would be problematic. I can imagine something written that would do a pretty good job of defining a hardship and certainly leave some leeway to allow the board to decide it.

My point is that by not having that clause it seems to me that in this small association we might run into situations where someone needs to rent because of a problem and we would have no way to temporarily allow that. If we allow it by default by not enforcing the rental restriction limit is there a legal case to be made by others who also want to rent that the rule in the CC&R is not being enforced equally? That is my point.

As for adding a rule to require all homeowners to live within the unit for 2 full uninterrupted years prior to rental -- I like it. It deals with purchases going forward and seems useful if the goal is to limit rentals. I will suggest that one too. Thanks.

And I agree that renters are not all bad. I was one myself and the article I referenced makes that point too. -- in fact the issues that I am uncovering as I try to take an active role on the board make me wonder if I wouldn't be better off renting.

Your board is considering entering dangerous waters . . .

If you can't afford something in the way it was intended and agreed upon, then sell it.

Tino,

Selective enforcement or inconsistant enforcement is a very tough case in a court of law. Sueing Boards should be the last recourse and done only when the plaintiff KNOWS that they can win. But that is not what you should be focusing on.

Rentals do not bring down value of an association. Property values go by other means of evaluation and with only 20 units,do you think that having a hardship clause in order to be able to rent out one of these 20 units will preserve the value of it? I highly doubt it. A well run, kept in pristeen condition is your answer, not some clause that a lawyer has created.

I did not start posting here at this forum to debate people or insult them but I do find your thinking quite simplistic. It has nothing to do with whether we can afford to live in our association. It is a concern that collectively each and everyone of else will lose value in our homes. You must certainly understand that. Do you own rental property in an HOA?

On the other hand in some areas I would agree with you. For instance we have a pool that no one uses. It is expensive to maintain but I am one of the people who successfully defends not shutting it down, as we all bought into this place knowing there was a pool.

DonnaS, I should have indicated who I was responding too when I made my last comment. I was responding to the poster who said "If you can't afford something in the way it was intended and agreed upon, then sell it." as I thought that was a misrepresentation of the situation.

I can easily see how trying to change to a no rental policy rule would never pass as an amendment in an established HOA. And as pointed out by someone else a hardship clause would be hard to effectively administer since people might try to abuse it, although I can't see how the voters would not like that, unless they were considering the administrative difficulty for the board.

The two year residency makes sense to me as it does accomplish the goal of keeping away investors.

I was also thinking of another approach: Set up a list ordered by the purchase date and state that the list is what is being used to determine a priority for which owners can rent. This would discourage investors in the same way.