Condo Assocation looking to charge owners who rent more. Is this legal?

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.

Good point. Thanks I'll message my lawyer and see what he thinks about this.

mrredskin said: are you just brushing aside the first reply to your topic???

Not at all. I'll respond to every post though since you guys and gals took the time to respond.

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

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.

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:

http://www.californiacondoguru.com/hoarticles/lease.html

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!

Good luck.

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!

xoneinax said: 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.

Good point. I live in the same building and rent out a smaller unit. I've really helped the association get on its feet but in the same token I do not want special rules built to protect myself. I want what's best for the WHOLE association, even if I do have to pay some amount for my rental. $200 is excessive and what scares me is there doesn't seem like there is any protection at all to stop them from raising this to $300 or more in the future.

Overall associations should have a reserve and make money based on the simple principle that the total fees are less than the amount we spend. That's the core issue. Charging renters will not fix that problem directly. It will curb users from renting out their condo in the short term though.

Tough spot to be in I guess....

DellFanBoy said: 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

You are only on the board of trustees as long as you agree with everyone else. Once you start dissenting they will vote you out and replace with with someone who agrees with everyone else.

DellFanBoy said: The only good news is I am on the board of trustees and can impact the decision somewhat.

What good is having power if you don't use it to your advantage when needed?

civ2k1 said: Cost for association membership should be somewhat related to the cost incurred by the units (whether by unit, square footage, or # of rooms is a decision for the membership to decide). I don't see where owner occupancy or tenant occupancy impacts the cost incurred.

Can someone here rationalize what additional costs a rented unit can cause to the association vs an owner occupied unit? I understand that too many investment units can impact mortgage availability, however that doesn't cause an expense to the association as an entity. If a tenant is disrespectful to the common area as a result of lack of pride of ownership (i.e. trashing common areas during a hosted party) that should be addressed on a case by case basis with regard to fines/reimbursement of costs.

The fee in question has nothing to do with operating costs. It has to do with the fact that the condo wants owner-occupied units, not sublet units. The philosophy of many associations is that owners are better neighbors because they have a vested interest in the property.

scrouds said: DellFanBoy said: The only good news is I am on the board of trustees and can impact the decision somewhat.

What good is having power if you don't use it to your advantage when needed?

I think the good part is having power to protect the community against bad decisions is the true advantage.

Since you live in one unit and rent out the other, just pretend like whomever is renting the other unit is some long lost relative you are letting stay there.

"Oh Yeah that is my second Cousin Manny and his wife Margarita"

"Yeah that is my wive's aunt Samantha and Uncle Niles"

DellFanBoy said:
1. However, my question is, can they do this legally?

It was legal at the time the HOA made the decision based on the information they had at the time.

SUCKISSTAPLES said: add your tenant on title as a 0.01% owner with a huge mortgage against their share only

Then the by-laws are gonna change to say, "If a condo has an owner who has less then 0.01000000000000001% ownership, then that condo owners shall pay 2x the normal fee".

I will save SIS from typing another answer. Then you change ownership to 0.010000001%.

Yes. It's perfectly legal, unless the by-laws or declaration of condominium say otherwise.

DellFanBoy said: Questions:
1. However, my question is, can they do this legally? Of course they can do it legally.

But if you sue them, you may change their mind, at least grandfather the existing units.