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Old 07-14-2008, 07:46 PM
 
4 posts, read 29,772 times
Reputation: 14

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We are looking to buy a condo in a location that has restrictions on number of renters. It's a very small complex and unfortunately b/c of their lease limitation, there are currently 5 places for sale in there, 4 of which are foreclosures and 3 of which have been for sale for nearly a year, and dropping in price by $20K+ since the start. All of their property values are dropping b/c they won't allow investers in. Such a shame! BUT -that is just my personal vent.

The condo we would like to buy is for my best friend who has just had some hard financial times. I know she would stay there for years and we would like to circumvent the HOA lease/renter restiction. Can we list her, my husband and myself on the title? I know it sounds crazy, but I'm not worried about the agreement between the three of us. Even if she left and we could not rent it out to anyone else, it would not be a financial hardship for us, we could pay the mortgage w/no renters and it would still be a good investment b/c of location, current price, etc.

Would a lease/purchase agreement work to get her in there and still be w/in the HOA bylaws? I'm just not sure how/if this can work, but just exploring all options to get around the HOA restricition legally. Also, can we still claim the mortgage, etc. on our taxes and would there be a problem with getting a mortgage if anyone else is on the title? We are putting at least 20% down. I do think it's entirely possible - even likely - that she will want to do a lease/purchase from us anyway down the road. Thanks for any advice/insight/even harsh comments .
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Old 07-14-2008, 08:13 PM
 
Location: Norman, OK
3,479 posts, read 6,344,689 times
Reputation: 1197
You have to read the HOA bylaws very carefully. But, in my complex, if you are listed as an "owner" of the condo (i.e., your name is on the title), then you can live in the place without worrying about renting rules. Essentially, the owner(s) is/are the names on the title. If you have 3 people on the title, you are all owners (1/3 each). That might bring complications later on, but that is what it means.
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Old 07-14-2008, 08:14 PM
 
351 posts, read 1,295,689 times
Reputation: 103
HOA's have stopped me from investing in a condo in Atlanta. I also agree they cause price drops because of the restrictions on renters.

I don't see why you can't just buy in your name and sublet to her and be done with it. Either keep her name on the HOA, tell them that it was a condition of buying that she stays or basically ignore them altogether. Also another option may be just to buy in an LLC and list her as a member or similar. That way she stays resident.

Just some thoughts......................
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Old 07-14-2008, 08:53 PM
 
4 posts, read 29,772 times
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Hmmm....I could just send the HOA her name? I thought they would somehow see the title/purchaser? I certainly like that option the best. I wonder if we could do that and see what happens? If there was an issue, then maybe we re-title it will all three names?? I don't know how that works, if the mortgage co. would know/care. Maybe do a quit-claim and put it in all three of our names if/when we have to? Kinda wait to get caught and then make it legal? I just need to make sure there is a way to make it legal and "right" with the HOA, even if it is in a roundabout way.

Thanks so much for your replies!
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Old 07-14-2008, 09:30 PM
 
Location: West Cobb County, GA (Atlanta metro)
9,188 posts, read 30,222,451 times
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You need to take a copy of the HOA rules/laws and see an attorney. No one on here will be able to give you a confirmed (and legal-accurate) answer on what to do without seeing the fine print on your HOA.

The non or limited renter laws in most HOAs are there for a reason. I have no idea what type of person you are - you may be a very nice person. But there are a lot of "investors" who are buying up tons of cheap and/or foreclosed properties and then basically becoming slum lords by renting them all out, until the market gets better and they may be able to remodel/flip the units and make a profit. Until the market does improve, many of these investors are renting cheap, not properly screening the applicants, making their units available for Section 8 vouchers, etc etc... the list continues. You honestly can't blame a HOA for not wanting this to get out of control, otherwise half or more of some of these communities would be rental units - and you might as well be living in an apartment complex at that point.

This is a very heated subject with many community leaders. Make sure you have an attorney instruct you on how to do as you wish, because basically if you do this wrong and break the lease restrictions on the property, the HOA members can make your life very uncomfortable.
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Old 07-15-2008, 04:41 AM
 
9,124 posts, read 32,776,875 times
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Putting her on the title would be a very bad idea. I know you say that you could carry the cost of the condo if she walked away, but do you realize that she'd have a claim to 1/3 of the condo if it was to go up for sale? I don't care how good of a friend you think she is, the last thing you want is to share ownership of a piece of property with here unless you're willing to give up 1/3 of the profits when it comes time to sell.
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Old 07-15-2008, 05:50 AM
 
3,972 posts, read 11,061,348 times
Reputation: 1429
Blackrabbit

The conditions exist because of the mortgage companies generally not because of HOAs. (It falls to HOAs to enforce it.) Here is why -- in the 80s when investors were buying up condos right and left in certain markets (think Miami) and then renting them out -- those buildings went to h*ll pretty quickly and lost value. People buying with the intention to live in a unit don't want to live among a bunch of renters.

So, the foreclosures were unbelivable -- investors were buying whole buildings -- because the units didn't hole their value.

Dawn, if the complex isn't in great shape fiscally, you may want to walk away. You need to check out its HOA budget and how they are doing in terms of assessments being paid, etc. You don't want to end up owning in a complex that basically ends up being an apartment complex. Repeatedly, and I am certainly not inferring this about you, we have seen over and over again, that investors don't take as good of care of the property as owner-occupants. Also, if they are over the rental limit already, then financing might be problamatic.
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Old 02-28-2009, 08:19 PM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,310,682 times
Reputation: 3587
Quote:
Originally Posted by dawnatlanta View Post
We are looking to buy a condo in a location that has restrictions on number of renters. It's a very small complex and unfortunately b/c of their lease limitation, there are currently 5 places for sale in there, 4 of which are foreclosures and 3 of which have been for sale for nearly a year, and dropping in price by $20K+ since the start. All of their property values are dropping b/c they won't allow investers in. Such a shame! BUT -that is just my personal vent.

The condo we would like to buy is for my best friend who has just had some hard financial times. I know she would stay there for years and we would like to circumvent the HOA lease/renter restiction. Can we list her, my husband and myself on the title? I know it sounds crazy, but I'm not worried about the agreement between the three of us. Even if she left and we could not rent it out to anyone else, it would not be a financial hardship for us, we could pay the mortgage w/no renters and it would still be a good investment b/c of location, current price, etc.

Would a lease/purchase agreement work to get her in there and still be w/in the HOA bylaws? I'm just not sure how/if this can work, but just exploring all options to get around the HOA restricition legally. Also, can we still claim the mortgage, etc. on our taxes and would there be a problem with getting a mortgage if anyone else is on the title? We are putting at least 20% down. I do think it's entirely possible - even likely - that she will want to do a lease/purchase from us anyway down the road. Thanks for any advice/insight/even harsh comments .
I am not a lawyer. I only play one on the internet.

Are you wanting to buy a condo to RENT to her or are you going to give her a "tenancy for life" or what?? That is what I cannot figure out here. If you are essentially holding title and allowing her to live there rent free then she is not a "renter".
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