Just some background - The unit is located in Boston Massachusetts. I own 2 units in a 30 condo building and at the last meeting owners discussed adding into the by laws to charge owner's who rent their unit DOUBLE the association fee. An increase from $200 to $400 dollars. I understand the logical reason is they want to keep the number of rented units low so this will penalize the renters and curb this action.
Questions: 1. However, my question is, can they do this legally? 2. Can it be retroactive? (IE if a unit was already rented can they charge this new fee to those units?). 3. How can they verify that its rented or not? 4. Since I own two units do I get two votes at the annual meeting on this issue? 5. Is there any laws or legal wording to stop them from charging $1000 fee or $500 fee. I mean we are at $200 extra now but what's to stop them?
My understanding when purchasing the condo was that anything INSIDE of MY units was my own business. If I wanted to have hardwoord floors and knockdown all my ways (Assuming it was no impact to the building structure) that I could do that. However now it seems that they are limiting what I can do with my unit.
Lastly it takes me from cash flow positive to negative $200. The only good news is I am on the board of trustees and can impact the decision somewhat. It's a tough place to be. Thanks in advance, Rick
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Obviously you had some mistaken assumptions when you purchased your condo units as an investment. It behooves you now to go to the condo board meeting and make your case. Yes, condo boards can enact additional fees for renters. Weather than can have two separate fee structures altogether depends on the condo by laws and your state laws. Read them.
FWIW, too many renters in a condo are a contentious issue. Some landlords do bad tenant selection and the renters make problems for the owner/residents to deal with. If more than half the units are rented arranging financing for the remaining ones can be difficult. So they issues your board is dealing with may well be valid ones. Their proposed response is not. But given that you have put your eggs into this building, you should get yourself to the meetings (better still get yourself on the board) and do whatever you can to protect and defend your investment.
By the way...your question about "how can they verify the unit is rented or not" is ridiculous. Do you not realize that the owners who live full time in the building can very easily know that a unit is rented out - simply by asking the tenants? Pretending that it is not rented when it obviously is won't earn you any points with the other owners on the board.
Frankly you sound rather naive about your investment. Perhaps time to bail and invest in something you understand.
Hey...thanks for the replies thus far. If possible let's not take this post down a road far too many FW post go. I am posting because I am asking for help. The reponses with reading the bylaws etc is very helpful. I humbled post looking for help in this community. I am LEARNing and never said I had all the answers. I ask questions not in the intent of fraud. Its a valid question of how does someone verify renting. Anyways I welcome more responses. Once again thanks in advance for responses.
HOA/Condo laws are rather complex and vary by state and locality. $200/month might be worth a quick consult with a local attorney that handles these issues.
This same B/S issue happened to me. We got an attorney letter stating that just because you rent out your unit, you cannot be treated differently (i.e. charged more dues).
BobM73 said:Did you read your condo association bylaws?
Did you read your state laws for condo bylaws?
Yes. I did read the condo association bylaws. There is nothing in there regarding this issue. This is why they want to bring it to a vote to add it to the bylaws. There are more owners who live in units than owners who rent so they have the majority vote in this matter.
I have not read state laws for condo bylaws. However I googled a bit and couldn't find anything. I'm guessing this is federal? Do you have any links or resources? Thanks in adavance
patty7182 said:This same B/S issue happened to me. We got an attorney letter stating that just because you rent out your unit, you cannot be treated differently (i.e. charged more dues).
DellFanBoy said:The only good news is I am on the board of trustees and can impact the decision somewhatI am guessing it is probably legal, and I can understand their perpective. However, to double the fee seems excessive. Try to propose a 25% surcharge, 50% surcharge, or a flat $100 surcharge.
Are they fully recognizing that the next time they need your help, you may not be so willing? If not, make them so.
Message edited by: xoneinax on 2009-11-10 12:27:38 CST
Yes, as an owner of two units, you have two votes.
As to the rest of it, it makes perfect sense from an owner point of view. Condos that have a certain percentage of renters vs. owner occupied units can have serious implications for financing or refinancing. Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs all have regulations making it harder to get a mortgage loan when the percentage of renters in a building is too high, usually 40 to 60 percent.
First, follow the advice above to read the bylaws and state laws. Each state is different but I found this piece by someone talking about the situation in CA:
If you like it, the full article is for sale and I think it includes the owner survey that she refers to.
Also, no matter how many units you own, very likely the power of your vote is proportional to your total ownership share. In some condos each owner may get one vote but in mine my vote is less than the vote of an owner of a two bedroom unit because they have a greater ownership share. Read your condo docs to find out how much your vote counts.
I would suggest if it looks like a higher condo fee for landlords will pass, you should try to reason with the association (before the vote) that if anything, the increase in condo fees should be proportional in some sense to how much extra tenants really cost the association over what owner residents cost. How that's determined, I don't know but certainly not DOUBLE!
That seems like a rather silly way to go. Eventually what will happen is that the renters will end up selling their units, which will depress the values of those properties. If they end up selling to owners the association fee for those units will have to go down and eventually the association will be stuck in the same situation as before!
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