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)?
Our association caps the number of allowed rentals at 20% (I think.. could be 25% but the difference would only be one person, it’s pretty small building). This is all explicity laid out well beforehand so potential buyers know that they should not purchase in our building as a rental investment property.
Owners interested in renting could get on the waitlist and when a landlord/owner moved or decided to stop renting a space would be available. However… as you can imagine, there was no movement on the waitlist and people were getting frustrated and illegally renting their unit.
So, we enacted a policy to cap rental terms at four years. After four years, an owner can either sell or move back in – and go to the bottom of the waitlist. Our thinking is that we understand that people move, get married, etc, and can’t always sell right away. But after four years of renting your unit you should make a decision on whether you want to sell or move back in or what.
It works out well. We comply with our FHA requirements, there’s plenty of movement on the waitlist and it’s cut down on the number of illegal rentals substantially.
Hope that helps.