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Old 01-13-2009, 08:27 PM
 
7 posts, read 60,346 times
Reputation: 15
Default HOA Prohibit Renting

I live in GA. My Homeowner Association prohibit home owners to rent their homes. This is in our Declaration of Covenants: "All homes shall be owner-occupied unless a tenant shall be approved by the Association.", and in 15 years, they have never approved any rental homes.

Unfortunately I found out about this after I moved out and rented my house. Now they force me to vacate the renter. The renter is my friend and his family really likes my house and they like to work things out with me. I told the home owner association that I will move back to live with my friends' family, whom I treated as my own family.

I lived very close by so I do intent to visit them from time to time, and do some yard work with them. I also reactivated utility under my own name and have my mail forwarding canceled. What else do I have to do in order to prove that I still live there?

The Declaration of Covenants does mention that say "all Lots within the Subdivision shall be and are hereby restricted exclusively to single-family residential use". Does HOA have the right to define "single-family" and use it against me?

Last edited by JoggleEagle; 01-13-2009 at 08:28 PM.. Reason: Added my State info in the post.
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Old 01-13-2009, 09:11 PM
 
Location: Nashville, TN
1,178 posts, read 2,554,904 times
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The HOA has the right to prohibit renting if it's in their documents. If you signed HOA documents when you bought the house this was probably in those documents and you will probably need to abide by them. The problem the HOA has is if they let your friends rent then the HOA is vulnerable to lawsuits from other members if they also want to rent their house. It does not sound like you really intend to live there anyway but just make it appear that you are. This in itself could probably cause additional problems.
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Old 01-13-2009, 09:37 PM
 
7 posts, read 60,346 times
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I understand the rule and am willing to obey the rule. I am just trying to find out a solution for two troubled families because of my not knowing the rules ahead of time. I don't want to pay two mortgages and I don't want to kick my friends' family to the street.

By breaking the lease contract and moving back to the home, I am actually complying the HOA rules. Not every landlord and tenant can do so, and I think HOA can still say to other members that no rules have been broken so they will not be vulnerable to future lawsuit.

Of course I'm not willing to move back to live with my friend, but if I have to do so, I will.

Could you please tell me what additional problems it may cause, and what I should do to prevent them from happening?


Quote:
Originally Posted by gbone View Post
The HOA has the right to prohibit renting if it's in their documents. If you signed HOA documents when you bought the house this was probably in those documents and you will probably need to abide by them. The problem the HOA has is if they let your friends rent then the HOA is vulnerable to lawsuits from other members if they also want to rent their house. It does not sound like you really intend to live there anyway but just make it appear that you are. This in itself could probably cause additional problems.
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Old 01-13-2009, 09:58 PM
 
1,305 posts, read 642,738 times
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In a nutshell, (and I'm really not trying to be offensive, so please stay with me), you're screwed.

The courts treat a HOA the same way as a legal contract between you and another party. It means that the terms in the HOA agreement are legally binding and you are fully allowed in a contract to sign away rights that you'd otherwise have in the United States.

Since your property has the deed restriction that prevents you from renting your house, you've given up that "right" that is associated with your property. So the quick answer is yes, they can take away the ability to rent your home. The question for you is - what do the covenants say will happen if you violate that rule? They cannot make you evict the person since an association doesn't own a gun or have arms, fingers, and eyesight. They can fine you, place a lien on your property, or foreclose your home depending on what is in your documents. You may want to read them and decide what you want to do based on what avenues the HOA has to punish you.

Do they have a right to define what single family means? Yes, the HOA does have that right. It should be clearly defined in the documents.

Unfortunately there is not much of anything positive I can say for you.
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Old 01-13-2009, 10:02 PM
 
3,191 posts, read 5,484,969 times
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maybe you could do a quit claim deed thing , or something and put them on the deed, so they will be co- owners??
we put our daughter on a deed once , of a house she rented from us, so she could be a owner/resident and get the full insurance ( at the advice of our insurance agent, because they would not cover our primary home in FL and the 'rental' in Ga, but this way they would )

maybe something like that would work?
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Old 01-13-2009, 10:39 PM
 
1,151 posts, read 1,824,282 times
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Quote:
Originally Posted by crazyma View Post
maybe you could do a quit claim deed thing , or something and put them on the deed, so they will be co- owners??
we put our daughter on a deed once , of a house she rented from us, so she could be a owner/resident and get the full insurance ( at the advice of our insurance agent, because they would not cover our primary home in FL and the 'rental' in Ga, but this way they would )

maybe something like that would work?
I was thinking something along those lines too, but the OP mentioned a mortgage, and any transfer of title would most likely violate the mortgage. But this is an angle that should be explored. You could even do a deed to your friend with a mortgage back to you so that you aren't in danger of losing the house if your friendship goes sideways. But again, your current mortgage might make all this moot.
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Old 01-14-2009, 12:10 AM
 
3,460 posts, read 2,418,600 times
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The HOA doesn't say it has to be solely owner occupied or your primary address does it? The language is vague enough that it wouldn't seem to prohibit you from subletting a couple rooms while you're maintaining that as your secondary home. You might even spend a night there every once in a while to keep it credible.

Maybe you could even hire your friend to make sure that the carpet doesn't collect too much dust while you aren't there....and then he becomes a live-in caretaker. Just make sure you don't pay him enough that you'd have to send a 1099 at the end of the year.

Your best bet would be to talk with an attorney about possible loopholes in the contract, and it would be a good idea to get a written opinion from him on the matter. When your HOA contacts you to tell you that you're in violation of the rules, you can send them a copy of the letter.
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Old 01-14-2009, 06:57 AM
 
7 posts, read 60,346 times
Reputation: 15
You are absolutely right. I don't feel offended and I appreciate your objective answer.

I did consult a lawyer who told me based on what is in the covenants, HOA has no right to prohibit all home owners from rental and he can help me win the case, but I don't want to go through that route because if I lose, I'll lose big time.

That's why I hope I could get some suggestion on what I can do to make it not like a rental, so I don't break the rule.

Single family is NOT clearly defined in the covenants. I'm not moving back with my whole family. It will be just me and another family of 4, who are my friends and are close to me as family members. Now I just wonder if worst case scenario happens and we go to the court, who will define single family?

Quote:
Originally Posted by bigtrees View Post
In a nutshell, (and I'm really not trying to be offensive, so please stay with me), you're screwed.

The courts treat a HOA the same way as a legal contract between you and another party. It means that the terms in the HOA agreement are legally binding and you are fully allowed in a contract to sign away rights that you'd otherwise have in the United States.

Since your property has the deed restriction that prevents you from renting your house, you've given up that "right" that is associated with your property. So the quick answer is yes, they can take away the ability to rent your home. The question for you is - what do the covenants say will happen if you violate that rule? They cannot make you evict the person since an association doesn't own a gun or have arms, fingers, and eyesight. They can fine you, place a lien on your property, or foreclose your home depending on what is in your documents. You may want to read them and decide what you want to do based on what avenues the HOA has to punish you.

Do they have a right to define what single family means? Yes, the HOA does have that right. It should be clearly defined in the documents.

Unfortunately there is not much of anything positive I can say for you.
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Old 01-14-2009, 07:01 AM
 
7 posts, read 60,346 times
Reputation: 15
Thank you SterlingGirl! I like your answer the best and that's what I hope would work.

Quote:
Originally Posted by sterlinggirl View Post
The HOA doesn't say it has to be solely owner occupied or your primary address does it? The language is vague enough that it wouldn't seem to prohibit you from subletting a couple rooms while you're maintaining that as your secondary home. You might even spend a night there every once in a while to keep it credible.

Maybe you could even hire your friend to make sure that the carpet doesn't collect too much dust while you aren't there....and then he becomes a live-in caretaker. Just make sure you don't pay him enough that you'd have to send a 1099 at the end of the year.

Your best bet would be to talk with an attorney about possible loopholes in the contract, and it would be a good idea to get a written opinion from him on the matter. When your HOA contacts you to tell you that you're in violation of the rules, you can send them a copy of the letter.
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Old 01-14-2009, 09:19 AM
 
Location: A little suburb of Houston
3,700 posts, read 10,961,223 times
Reputation: 1884
Quote:
Originally Posted by crazyma View Post
maybe you could do a quit claim deed thing , or something and put them on the deed, so they will be co- owners??
we put our daughter on a deed once , of a house she rented from us, so she could be a owner/resident and get the full insurance ( at the advice of our insurance agent, because they would not cover our primary home in FL and the 'rental' in Ga, but this way they would )

maybe something like that would work?

Not a good idea at all. Never add anyone to the deed unless they have paid for it. However, there is a work around for this situation. It is called a land-contract or rent-to-own. Basically, get your attorney to write up a purchase agreement for the property where you hold the deed until the property is paid off or they can get their own mortage and pay you off (or vacated if they decide not to finalize the purchase). All or a large percentage of the "rent" will go to the purchase of the house. Make sure the contract is clear on maintenance, etc. just like a rental contract. This way your tenants will not be "renters" but "buyers". Of course, if they decide to purchase the property in fact, you will have to go through with it. Talk to your attorney and see if this is possible.
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