Help with HOA Leasing Restrictions!!! (Austin, Howe: real estate, condos, loans)

[StopHOAs]

Good Evening,

I own a condo in downtown austin and decided to rent it out; subsequently, my tenant & I entered into a five year lease. At the time we signed the lease, there were no leasing restrictions in place. A month after the lease was signed and my tenant moved in, the HOA changed the rules and regulations to only allow 30 percent of the condos to be leased. Another amendment to the rules & regulations was to limit the lease terms not to exceed one year and now they also want me to apply for a leasing permit. (The HOA did not change/amend the homeowner declarations or bylaws and both allow leasing to exceed 12 months.)

My questions are:

1) Am I required to "apply" for a leasing permit even though I already have a signed lease? (I am afraid if I sign the document then I am agreeing to the new rules and regulations AND that the HOA will deny my permit based on the lease exceeding one year.)

2) Is it legal for an HOA to deny my leasing permit request based on terms I previously agreed to with my current tenant prior to the new rules and regulations taking effect?

3) Can they make me evict my tenant if they deny my leasing permit and then claim I am not allowed to rent my property?

Any and all opinions welcome. Thanks!

[austin-steve]

You probably need to speak with a real estate attorney. Property rights, even in Texas, are slowly being eroded by these kind of limitations, and the very meaning of "ownership" of property is being changed. Like frogs in boiling water, I see it happening.

The City of Austin is also now contemplating a Rental Registration program which would place all property owners of all homes that need to be rented under the governance of city rules and code enforcement.

Not trying to start a political debate, but people in general seem to be willingly and/or unwittingly allowing the slow morphing of freedoms and property rights into something that will eventually make us all "renters" for all practical purposes.

Steve

[ImOnFiya]

Originally Posted by austin-steve

You probably need to speak with a real estate attorney. Property rights, even in Texas, are slowly being eroded by these kind of limitations, and the very meaning of "ownership" of property is being changed. Like frogs in boiling water, I see it happening.

The City of Austin is also now contemplating a Rental Registration program which would place all property owners of all homes that need to be rented under the governance of city rules and code enforcement.

Not trying to start a political debate, but people in general seem to be willingly and/or unwittingly allowing the slow morphing of freedoms and property rights into something that will eventually make us all "renters" for all practical purposes.

Steve

Steve,

Since you now live closer in the city - Yea! (Yes, I keep up on your blog.) If you have time, please speak (or send an email) to the Austin City Council on this issue. I know sometimes complicated issues such as this often get ordinances enacted without the political bodies "full understanding" of those issues.

FYI: You can speak to the Austin City Council on Thursdays during 'Citizen Communications'. I know Council Members Shade, Cole, Leffingwell, and Martinez (a majority) would probably be most receptive.

[IC_deLight]

Yet another HOA/condo story about a board or property manager creating "rules" about properties they do not own. If you "own" property burdened by an HOA/condo corporation, you already have fewer rights than a tenant despite supposedly being an "owner".

The HOA/condo corporation board and property managers engage in conduct to restrict your use and enjoyment of your property under the pretext of "preserving property values". Their conduct always severely diminishes the value of your property to you.

In this case, they no doubt have taken the position that "renters bring down property values". An absurd position, of course, since no one but the owners knows whether the property is rented. The financial hardship this will cause, however, will harm your property and all the other condos in the building. The management companies thrive on financial hardships and promote activities that tend to cause financial hardship.

Expect that the management entity will try to insist upon horning in on the lease agreement between you and your tenant. Fees will be charged for the "application". Moreover, the management company will try to collect personal financial information from your tenant that is none of their business. Another discriminatory practice the management company will try to impose is to demand that your tenant undergo a criminal background check. This is absolutely discriminatory and offensive. After all, none of the owners is required to undergo such a check and neither has the management company.

The elimination of property rights is due in no small part to HOA and condo private corporations imposed upon your property. There is no due process, no equal protection, no court of competent jurisdiction, no bill of rights - because it is a private corporation. The vendors that promulgate this power over the property owners are the very ones that profit from the disputes they provoke. Are you willing to identify the management company "handling" your condo corporation?

[Austin97]

Originally Posted by IC_deLight

Yet another HOA/condo story about a board or property manager creating "rules" about properties they do not own. If you "own" property burdened by an HOA/condo corporation, you already have fewer rights than a tenant despite supposedly being an "owner".

The HOA/condo corporation board and property managers engage in conduct to restrict your use and enjoyment of your property under the pretext of "preserving property values". Their conduct always severely diminishes the value of your property to you.

In this case, they no doubt have taken the position that "renters bring down property values". An absurd position, of course, since no one but the owners knows whether the property is rented. The financial hardship this will cause, however, will harm your property and all the other condos in the building. The management companies thrive on financial hardships and promote activities that tend to cause financial hardship.

Expect that the management entity will try to insist upon horning in on the lease agreement between you and your tenant. Fees will be charged for the "application". Moreover, the management company will try to collect personal financial information from your tenant that is none of their business. Another discriminatory practice the management company will try to impose is to demand that your tenant undergo a criminal background check. This is absolutely discriminatory and offensive. After all, none of the owners is required to undergo such a check and neither has the management company.

The elimination of property rights is due in no small part to HOA and condo private corporations imposed upon your property. There is no due process, no equal protection, no court of competent jurisdiction, no bill of rights - because it is a private corporation. The vendors that promulgate this power over the property owners are the very ones that profit from the disputes they provoke. Are you willing to identify the management company "handling" your condo corporation?

Many lenders are putting restrictions on the percent of rentals in a building that they will lend to. This means that property values do go down if the pool of possible buyers is smaller because many fewer people can get loans to buy a condo in a community where > 30% of the units are rented out.

[TexasHorseLady]

Originally Posted by austin-steve

You probably need to speak with a real estate attorney. Property rights, even in Texas, are slowly being eroded by these kind of limitations, and the very meaning of "ownership" of property is being changed. Like frogs in boiling water, I see it happening.

The City of Austin is also now contemplating a Rental Registration program which would place all property owners of all homes that need to be rented under the governance of city rules and code enforcement.

Not trying to start a political debate, but people in general seem to be willingly and/or unwittingly allowing the slow morphing of freedoms and property rights into something that will eventually make us all "renters" for all practical purposes.

Steve

You said it. Once again, one of my favorite quotes is applicable:

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

[IC_deLight]

Originally Posted by Austin97

Many lenders are putting restrictions on the percent of rentals in a building that they will lend to. This means that property values do go down if the pool of possible buyers is smaller because many fewer people can get loans to buy a condo in a community where > 30% of the units are rented out.

Well how about the "choice" argument that the HOA/condo proponents like to use. The buyer can choose a different lender.

You may be aware that the feds intend to prohibit FNMA, FMAC, and FLB from investing in properties where "private transfer fee covenants" have been imposed upon an owner's transfer of his property. However, instead of eliminating the transfer fee (which does not benefit the owner), the HOA/condo vendor industry is simply trying to lobby to continue extracting them. These lenders represent probably 90% of the residential market but the beneficiaries of these "transfer fees" are certainly advising their "clients" to continue to impose them - to the detriment of all the owners in the HOA/condo corporation.

The pool of possible buyers is going to shrink anyway if there is a choice in properties - because informed buyers certainly don't want to purchase in a place they can't use and enjoy, can't sell, can't rent, have to pay never-ending "assessments" on, and which can be taken from them in a heartbeat by the HOA vendors. Fortunately, the federal government is making it harder for buyers to get stuck in such a situation.

[HappyTexan]

But if you did all that before the new rules, wouldn't you have to be grandfathered in ?
Wouldn't those new rules apply to you with your NEXT rental after the 5 year lease expires ?

I'd suggest an RE attorney at this point.

THL..great quote by Ben Franklin. I use it alot myself

[StopHOAs]

Thanks everyone! HappyTexan: I suppose that's my exact question. Since I entered into a lease before the new rules and regulations shouldn't the 5-year lease be grandfathered in?

Yes, unfortunately, I think it's time for an attorney...

[gpurcell]

Seems pretty cut and dried to me--you entered into a valid contract with a renter that fulfilled the terms of your HOA agreement at the time it was signed. If it were me, I'd respond with a formal letter pointing this out but you may wanted the added security/implied threat of having it on a lawyer's letterhead.