The HOA war against tenants

Long-term tenants sometimes viewed as pariahs in association-governed communities
By Deborah Goonan, Independent American Communities

 

If you think that association-governed communities only affect the rights of their member homeowners, think again.

In HOA-ville, tenant rights are compromised, too. Tenants who lease condo or HOA homes for 6 months or more are often treated like second-class citizens. Sometimes homeowners — especially owner-occupants — openly resent their presence in the community. .

For example, consider this Florida attorney’s column.

 

Condo swimming pool

Tenants Have Right To Use Common Property (FL)

Joseph Adams BY JOSEPH ADAMS July 22, 2018

Q: Our condominium recreational facilities have been very popular this summer. We have received many complaints from owners that they have not been able to enjoy the pool due to the number of guests and renters using the pool. Is it possible for the board to adopt a rule that prohibits renters from using the pool, or at least set aside “owner only” time? (A.B. via e-mail)

A: No. Section 718.016(4) of the Florida Condominium Act states that a tenant leasing a unit has the right to use all association property and common elements that are otherwise generally available for use by unit owners, unless the tenant has waived this right in writing.

Generally, the board of directors is authorized to make rules pursuant to the authority granted under the condominium documents. However, board adopted rules must be reasonable and cannot conflict with the rights granted by the law or the condominium documents. Therefore, a rule prohibiting renters from using the association’s common element pool, or restricting use rights, would be invalid as it conflicts with the law.

The board may be able to set limits on the number of people affiliated with a particular unit who can use a recreational amenity at the same time, but that rule would need to be applied equally to all units.

Source:
https://www.floridacondohoalawblog.com/2018/07/22/tenants-have-right-to-use-common-property/

It’s hard to miss the anti-tenant sentiment from the homeowner seeking “homeowner-only” hours at the condo association’s swimming pool.

Yet this is a surprisingly common attitude.

The truth is, tenants account for at least 20 percent of residents in most residential communities governed by condo and homeowners associations.  In Florida, the closer a community is to the Atlantic or Gulf coasts, or a resort such as Disney World, the higher the percentage of tenant-occupied homes.

The fact is, without tenant occupancy, many, if not most, of the housing units in the condo HOA would be vacant.  Who would pay assessments and monthly fees to cover the costs of maintenance of common areas and shared amenities such as swimming pools?

And if you think that only property owners pay assessments, you’re mistaken.

Fact: Either the owner/landlord of the property passes these costs onto the tenant in the form of monthly rent, or the lease requires a tenant to pay monthly fees directly to the HOA, in order to gain the privilege of access to recreational amenities.

So it’s hardly fair to demonize tenants for taking advantage of amenities they pay for!

 

Lease-contract-signing-signature-tenant
(Pixabay.com free image)

The anti-rental faction in HOA-ville

Some homeowners will argue that their community should consist entirely of owners who actually reside in their homes. They object to any owner who happens to purchase a home or condo as a real estate investment, with the intent of renting the property to offset their cost of ownership, or generating a positive cash flow.

In some cases, a small group of homeowners will even frown upon the owner that holds onto their home as a rental property, after they are forced to relocate for a new job opportunity or a military transfer.

Federal housing policy also creates controversy, with the FHA’s lending requirement that at least 50 percent of condominium units must be owner-occupied. If a condo association meets stringent financial requirements, a 2016 policy (Housing Opportunity Through Modernization Act or HOTMA), will allow owner-occupancy rates as low as 35%. As a result, very few condominium associations are FHA certified, especially at the lower owner-occupancy rate.

When buyers cannot obtain mortgages to purchase condos, sales are often limited to cash buyers. And real estate investors tend to be cash buyers.

That’s why a high percentage of association-governed communities — especially condominium or townhouse associations — evolve into de facto rental communities over a decade or two.

Sometimes owner-occupants will complain that tenants simply don’t care about maintaining homes they don’t own.

But that’s an unfair generalization.

It’s also a well-known fact that a significant number of condo HOA members — owners who don’t actually live in the community — tend to resist increasing monthly fees or paying special assessments needed to keep the common property up-to-date and well-manicured.

If the common property starts to look shabby, and when maintenance is deferred, all residents — owners and tenants alike — will respond by spending less of their time and hard-earned money on maintaining their personal spaces.

Nevertheless, tenants often become the scapegoats, blamed for the deterioration of the entire community.

That leads owner-occupants to push for rental restrictions. For example, read this California attorney’s article on state laws governing an association’s rights to restrict their members’ rights to rent their properties to tenants.

Real-estate-purchase-house-home-keys

 

Rental Restrictions (CA)

By Mary M. Howell, Esq. & David A. Kline, Esq

In 2011 the California legislature enacted SB 150, a bill championed by the California Association of Realtors, intended to deprive association owners of the ability to restrict rentals within their communities. This bill added section 4740 (formerly 1360.2) to the Civil Code. Owners within a common interest development are free to amend their CC&Rs to restrict rentals when it is reasonable to do so.

Since January 1, 2012, this right has been severely abridged. However, the law does not affect rental provisions that became effective before January 1, 2012.

The statute provides:

• Any amendments to CC&Rs which would prohibit rentals of dwellings within the development are effective only as to (a) owners who purchased after the amendment was recorded, and (b) prior owners who consent to be bound by the amendment.

Read more:

https://www.epsten.com/rental-restrictions-2-2/?utm_source=July+2018+-+Epsten+Grinnell+%26+Howell+Legal+Update&utm_campaign=July+2018+Newsletter&utm_medium=email

 

Statutes that enable HOAs to restrict rental rights often lead to unintended consequences.

Consider California’s statute, as explained above.

Over time, as new owners buy homes subject to rental restrictions, the supply of dwellings available for rent in some condo and HOA communities will decrease. Unless the real estate market provides a large supply of new apartment buildings and rental home communities, reducing the number of existing homes that can be leased is bound to create a short supply, driving up the cost of monthly rent.

That will result in housing that is less affordable, in a state that already severely lacks affordable housing.

From the same article, and as highlighted in the excerpt below, California case law has determined that it is perfectly legal for an association-governed community to prevent a homeowner from having a roommate who is willing to share living expenses by renting spare bedroom. (Similar laws exist in other states.)

 

In Colony Hill v. Ghamaty, a court of appeal upheld the application of a “single family residential use” restriction to prohibit room rentals (a “mini dorm”).

Restrictions based on “familial status” are hard to enforce, if the basis for enforcement is that the residents aren’t related “by blood or marriage.” Case law in the last 25 years makes it clear that a “family” consists of persons living together in the normal familial sense—sharing all rooms, sharing the responsibility for maintaining, paying the rent, etc. If (as the court in Colony Hill made clear) the use is not familial, but commercial (as when roommates are sought by advertisement, and certain portions of the homes are “off limits” to the residents), it is appropriate to conclude these are not “single family” uses.

 

Woman-confused-confusion-I don’t know
(Pixabay.com free image)

Consider how California case law creates unnecessary confusion as to whether or not an unrelated person can rent space from a homeowner.

For example, suppose the owner of a 3-bedroom, 2.5 bath home decides to share expenses with a roommate. The pair agrees that the owner will exclusively use the master bedroom suite, while the tenant will exclusively use the second bedroom and the hall bathroom. The owner wants to keep the 3rd bedroom for a home office and storage. The roommate agrees to use a utility closet for extra storage.

Would this arrangement be considered a valid “single family” use or a “commercial” use, since, technically, certain portions of the home are “off limits” to residents?

Note that this example is certainly not comparable to a short-term rental, where the owner merely provides temporary lodging as an alternative to a hotel.

You can bet that at least one anti-tenant homeowner in HOA-ville will file a formal complaint in this situation, even though there is no harm done, and two individuals mutually benefit from home sharing.

So, in most cases, a tenant leasing space in an owner-occupied home must be very discreet about the details of the arrangement, for fear of alerting the HOA.

 

Perhaps this explains why tenants are opting to rent in apartment communities, and starting to avoid condo and homeowners’ associations.

 

 

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