Home › Forums › Real Estate › What are other condo associations doing, if anything, to limit renting to comply with mortgage financing rules (such as those under FHA)? › Reply To: What are other condo associations doing, if anything, to limit renting to comply with mortgage financing rules (such as those under FHA)?
1) See a lawyer. I’m pretty sure PoP links to recommendations for lawyers specializing in association law.
2) Be careful about time limits. In DC, tenants rights trump your condo laws. If you tell an owner they must stop renting after x-number of years, but they have a tenant who won’t leave, your association will lose that fight and possibly be subject to damages.
3) That being said, my old co-op went through the same thing. We had a 20% cap on units allowed to be rented with a first-come, first-served waiting list, with the exception that the Board can vote to temporarily go over the cap if an owner can demonstrate hardship/extreme circumstances. Instead of a time-based restriction, we implemented a tenant-based restriction…whenver a tenant left, the owner had to re-apply for the ability to rent. If we were under the cap, there was no problem and he/she could rent again to a new tenant (who also had to be approved by the Board with full credit/background checks). By restricting it to tenant based instead of time based, the thought was we could avoid any issues where an owner’s time was up but had a tenant refusing to leave (and in DC you can only kick out a tenant under very narrow circumstances, and I’m pretty sure an association’s bylaws aren’t one of them).
4) Not sure how Co-op’s are different than condo associations here, but my guess they have similar operating structures, with the caveat that a co-op board has far more power than a condo board to police itself. As someone already noted, if you don’t have committed people to do this you are pretty much SOL. Everyone thinks it’s someone else’s problem until they go to sell and can’t find buyers because too many people are renting, and then they blame the Board. Your problem is that if you already have a majority renting, the people currently renting probably all individually want to keep on renting because it is in their short term self-interest, even though when the time comes for one of them to sell they will then be stuck holding the bag. They either can’t appreciate/don’t understand the larger implication of their individual actions. Apathy and indifference for condo associations is just as bad as busybody/micromanaging boards. It’s why I moved to a single family home. I got tired of relying on other people for my financial security/well being. There seem to be too few people willing to put in the time an effort, and a large number of people just don’t seem to understand that “owning” an apartment in a condo or co-op doesn’t mean that your responsibility stops at your door. Our old law firm told us their biggest problem was owner participation…they had some buildings where the association couldn’t even get an official quorum year-in, year-out, and were stuck in perpetual limbo. And renting is a particularly stick issue, since people who “own” something feel they should have the right do what they want with it, even it means everyone suffers.