By Deborah Goonan, Independent American Communities
Today’s blog serves as a reminder that plenty of tenants suffer as a result of dysfunctional homeowners and condo associations,too. This growing consumer protection movement is not strictly limited to homeowners.
The truth is, one of the biggest issues of contention – particularly in condo associations – is that the percentage of residents who are tenants is rising, while the percentage of owner-occupancy is declining.
There are a few reasons why we see this trend, in my opinion:
- Former owner-occupants have moved onto either a detached single family home or they have had to relocate for employment or other personal reasons. Because they were upside down on the mortgage, they have chosen to rent their condo, hoping to wait out the market until they can sell without having to bring cash to the closing.
- Investors have taken advantage of high vacancies, distressed properties, and low prices to buy condos – often in bulk – and rent them to tenants.
- Plenty of people simple cannot afford to buy a home, or they cannot qualify for a mortgage. They have to live somewhere, and there aren’t enough apartment community or privately owned rental properties to meet demand in some markets. The problem is especially acute for people with limited incomes, seeking affordable rents.
As a result, many condo associations are finding it difficult, if not impossible, to cap the percentage of units rented at 30%. Many are approaching or exceeding 50% tenant occupancy. And that’s part of the reason why special interest groups, including the National Association of Realtors, is pushing for relaxing owner-occupancy requirements for securing FHA mortgage loans.
Tenants who rent in Association-Governed Residential Communities face their share of ill will from owner-occupants, and must also deal with irresponsible landlord-owners, non-responsive Association Managers, or both.
The following report is a prime example. The tenant, Susan Burnett of Denver, is caught between the landlord and the condo association, bickering over who should pay for clean up of mold in her condo.
Tenant looks for help after mold mess makes her home unlivable (Fox31 Denver)
“(My landlord) said, ‘You’re on your own. You fix it. Take your stuff. Just get out of here,’” Burnett said. “That’s where she left me.”
Though she’s trying to move on, Burnett says nearly all of her things have been lost due to the mold. She says her insurance won’t cover mold and she says nobody has offered to help her with any of the costs.
“It’s just been so frustrating not being able to get any help,” Burnett said. “There’s no laws. There’s nothing to help someone like me in a situation like this. I’ve talked to lawyers. I tried the city. I don’t know what to do.”
Of course, anyone living at this condominium, owner or tenant, is potentially harmed by the presence of toxic strains of mold. But when a condo association leans more toward tenant residency than owner-occupancy, owners tend to shift blame to the Association and, specifically, the management company.
Let’s use some common sense. The reality is, it is the owners that will have to pay for clean up of mold and related repairs. The management company cannot prevent leaky plumbing. They take direction from the Association’s board of directors. The Association must rely upon collection of assessments to pay for all maintenance and repairs.
The problem is, many of those owners may be reluctant to fork over the money necessary to alleviate the problems, especially since they don’t have to live with it.
Yes, the tenant can move out. But in this case, she must replace all of her belongings, as insurance policies tend not to cover damages caused by mold. Of course, this makes it all the more difficult for Burnett to save a down payment to buy a home of her own.
I would bet that more than one condo unit is affected by mold. And I know from the many owners and residents I talk to every week, that mold infestation is a common problem all across the US.
And the bickering back and forth between the Association and landlord-owners merely complications an already difficult situation.
Which highlights, once again, a common but fundamental flaw in the socio-economic structure of Association-Governed Residential Communities.