By Deborah Goonan
This blog series – Are Homeowner and Condo Associations “Mini-Governments?” – will compare the typical governance structure of HOAs (using the term generically) to our local governments, as guided by the principles of our Constitutional Republic.
Part 5. Key differences between Homeowners’ or Condo Associations and Local Governments in America: Diluted landlord and tenant rights
- Landlord and tenant rights are diluted in an HOA.
In recent years, it has become common for Associations to enact and enforce rental restrictions upon owners.(1) This causes difficulties for owners that are forced to move to another location for employment, but are unable to sell their homes. In many cases, the HOA has changed rental restrictions (or lack of them) that owners agreed to at the time of purchase. Although it seems very unfair, there is very little that owners can do about it.
When a homeowner is able to become a landlord in an HOA, there are often other unexpected rules to contend with.
- Although you may be able to rent your home or condo unit, the HOA may enforce a minimum lease term, such as 6 months or one year. A new buyer may be prohibited from leasing to a tenant for the first two years. Or there might be a cap on the total percentage of units rented at any given time, and if that maximum has been reached, you will not be permitted to lease your unit to a tenant for that reason alone.
- In some states, the HOA can collect rent from the tenant if the owner is delinquent on assessments.(2)
- Also, the CC&Rs may state that the HOA has the right to approve or reject a tenant, under certain circumstances.(3)
Tenants living in an Association-governed community should be aware of the following:
- The HOA Board can withdraw a tenant’s rights to use common amenities (such as the pool or the fitness center) if the owner-landlord is delinquent in assessments or has failed to pay a fine or other debt related to any one of the properties he owns.
- In some states, the HOA Board can require a tenant to pay rent directly to them, instead of their landlord (see above). If a tenant fails to pay rent to the HOA under these circumstances, the HOA can evict the tenant without the landlord’s permission!
- When renting a condominium in need of service or repair, the tenant must contact the landlord (owner). However, with some issues, such as plumbing or roof leaks, it can be difficult to determine who is responsible for the repair – the owner or the HOA or both. In a typical landlord-tenant situation, if the landlord fails to repair within a reasonable amount of time, the tenant has the right to hire a professional to do the work, and then deduct that amount from future rent payments. However, a tenant in a condo may be prohibited from allowing outside contractors to do work on areas that are owned by the HOA, and may have to wait until the landlord-owner and HOA resolve any disputes about who is liable for the repair.
In summary, both landlords’ and tenants’ rights are significantly diluted in HOAs.
1 Homeowners’ Associations clamp down on rentals, USA Today, Oct 4, 2012
http://www.usatoday.com/story/money/business/2012/10/04/homeowners-oppose-rentals/1614229/
2 Can Homeowners Association Collect Rent from Tenants if Landlord/Owner is Delinquent in Fees? Ward Damon Attorneys at Law, Jan 19, 2015
3 Can an Association approve or disapprove potential purchasers and tenants? Lindsay Raphael, Esq., Sun Sentinel, Condos and HOAs blog, March 16, 2014
Next: Part 6, In Conclusion
