Condo Associations and Rental Caps (Buckhead: real estate, apartment, leasing)

[ATLiens]

Hello everyone!

My girlfriend and I recently went to view what we thought was an apartment for rent in a building that is primarily made up condos in Buckhead. After declaring our interest to rent, the owner, a friend, informed us that the association limits the amount of units available for rent and that he is currently on a waiting list. He had consulted an attorney who suggested a quitclaim deed, transferring a miniscule percent of the ownership to us, making us co-owners of the unit, thus working around the restriction.

I have taken a few real estate classes, but this is well above my pay grade. To me it seems like the owner will be assuming a large amount of the risk in this situation by making us co-owners on the deed, with little risk to me and my girlfriend.

With that being said, does anyone have any advice on the situation? Should we just move on and find another potential apartment or is this a typical arrangement in these situation?

[ATLTJL]

Just find a legit apartment.

This sounds crazy and it's probably a scam. I bet the guy is looking for someone to transfer ownership to so he can walk away from the mortgage and then the bank will come after you instead of him.

Don't walk, RUN from this situation!

Even if it isn't an actual scam, since you said the owner is a friend, why would you want to assume any potential risk for something as simple as a rental situation? It seems fishy to me.

If you really want to rent the unit, just agree to tell the association you are his brother or your girlfriend is his sister and he is just letting you stay there. Usually rental caps are to keep people from renting their units out, but they aren't allowed to keep owners from letting family members stay in their homes. As long as you keep up the ruse and pay him under the table, there shouldn't be an issue.

[ATLiens]

I think it was more of a TIC situation and that a portion of the deed was transferred, but not the mortgage. With that being said, I am leaning that direction anyways.

[midtown mile girl]

Actually, you are just as liable for hoa fees, etc. as the owner is if you own a tiny part of the condo. We have one like this in my building (the other owners are not happy about this), and it was brought up at a condo meeting. The building lawyer was there and said the fractional owner was just as liable as the other owner involved.

[jsvh]

Condo buildings to limit the % of units that can be rented. There are some boarder-line legal ways around it such as setting up an LLC and transferring ownership. However they usually have some level of risk, mostly to the owner such as the mortgage getting called. This will also **** off the HOA. I would proceed with caution, in this case you could end up liable if the owner is sketchy or runs into financial or legal trouble. Find a Real Estate Attorney you trust to review this if you decide to move forward.

[ATL Golfer]

This strategy works. I have a friend how owns several condo rentals (like nearly 20). If the HOA gives them any grief, he has the tenant sign a document showing that the tenant owns .00001% of the entity which owns the condo. It is now owner occupied. Problem solved.

You have NO risk in this situation. You're buddy is risking fines from the HOA.

I'm currently leasing a condo to a person who was previously approved under the previous owner. HOA hasn't caught on yet that I am a new owner and that the lease should be terminated under the HOA docs. Crosses fingers that they do not find out for a long time.

Also, I woudn't even record the quit-claim deed until the HOA really starts pushing. I would be fine with this, particularly if the owner was a friend.

[ATLiens]

Thanks for the advice, guys!

Decided to pass on the apartment, so if anyone has any tips for finding a nice rental in Midtown or VA-HI let me know!