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In California, there was a bill a few years ago (SB150) that basically prohibits HOAs from changing the rental rules from when the owner bought the property.
There is one small exception that deals with charging higher HOA fees for rentals than owner occupied units but those fees have to be only the costs the HOA incurs by having renters (no penalty or anything) These are rare. cc1366.1
I think I know the answer to this but a friend who lives in a condo thinks it might be different since I live in a HOA in DE and he in a Condo in Virginia Beach. Here is his situation;
Condo board member uses her condo as a rental unit. There has been some trouble and the board members have determined that rules need to be put in place. Since renting is not specifically prohibited, she can still rent and he is fine with that, but he feels that it is a clear conflict of interest and she needs to recuse herself from drawing up rules. He feels that the conflict is because as the sole board member who rents, she and only she benefits from the lack of regulations ( i.e fees and penalties, if the new rules are passed). She was allowed to voice her feeling and a community member suggested it was a conflict at the board meeting and they now are waiting on a legal opinion.
We do not permit renting or subleasing in our HOA so it has not been a problem for us. But I think our situation is the same. We have a board member whose son owned a company that we contracted to do business with years prior to his arrival on the board, so he recused himself when it came to voting on that contract renewal to avoid even the appearance of impropriety. I see this the same way as a board member who rents his unit voting on regulations for rentals.
Any thoughts?
If I understand this scenario correctly there is a Condo Board Member who does not live as a resident on the property?
That seems a poor set up.
As someone else mentioned, the Declarations and By Laws will outline the top level restrictions and the Rules and Regulations should help delineate them. A well structured set of rules and regulations should leave little room for error of interpretation. Hopefully - depending on the size of the community, this COA/HOA has good legal representation, and management company, and consistently applied enforcement of the rules and regulations that currently exist.
With any dispute there is a hierarchy i.e. Federal Law trumps State law which trumps, your COA declarations & by laws. So you will want to examine closely what these problematic 'infractions' are, to not be subject to legal costs from disputes. For example, people who need a seeing eye dog or a so called 'comfort' animal etc...
That being said, the thing you need to clarify, is, can an owner who doesn't live on property (they could own two for example and rent one, which would be alright) convey the best interests of the Community of Residents? That seems a fundamental flaw in my mind.
If the "problems" are related to this 'non resident' board member's "tenants", then, while they can "vote" on issues (changes to rules and regulations) they should be able to be outvoted by simple majority. Say, 2 to 1, 3 to 2 etc... and be subject (as an owner) to pay for any fines / fees damages that their tenant incurs. This would serve as a good inducement for the non resident board member to correct the 'problems', via vetting better tenants, and paying for the problem tenants they apparently currently rent to.
While I don't see it as direct conflict of interest it sure doesn't sound like a healthy structure to insure the best interests of the larger community of residents. Also, if said Board member is a high ranking officer beware them playing games to circumvent a full vote by others. The place I currently reside used to have a Board President whom I have been told by the building manager would purposely call emergency meetings to get around a full board vote.
I live in an COA and there are other concerns with having too many rental units and ways to limit it slightly with hardship conditions (loss of job / relocation) and family as landlord type allowances (e.g. someone buys condo for elderly mom, sibling etc...).
The problem with too many rentals is the higher lending requirements from financial institutions when they see a threshold of, say 25% or more of rental units in a multi-unit building. Prospective buyers may not be able to get financing, while an 'Investor' will (or will not often need it) thus, turning a condo community into an apartment complex. Again, not that this is bad for the landlords - but it may turn a once nice community of residents into an environment not attractive to someone wanting to call it their home.
What if she were not the only person renting out their unit? What if a third of the homeowners rented out their units? Would you say that none of them could vote on a rule change about rentals?
You can amend the CC&Rs to change rental policy. People that have their units rented AT THAT TIME will be grandfathered as long as that tenant is residing in the unit. If you unit wasn't rented at the time of the change you do not get to rent your unit in the future.
I've lived in condos where rentals were allowed. Never again. Our biggest selling point where I live now is our no rental policy.
We also only let relatives use the unit if the owner isn't there to avoid the "friend" who is actually paying rent on the sly.
Renting your unit and being on the board are perfectly fine in most cases. The Board does not represent themselves but the building as a whole.
My condo has a board of 5.
4 board members live in the building year round and one rents his unit. The building is around 80% primary residences.
I would think that since roughly 20 percent of building rents it is a good set up as that 20% has someone representing them on the board.
Renting is a hot topic. Also what is a rental is also a hot topic. Year round tenant, winter tenant, summer tenant, AirBNB, family members using unit when owner is not there, kids home from college, Girl Friends, Boyfriends, room mates.
Years ago when I was single I let my younger single sister stay at my place for a few months while I was on a long business trip. The coop claimed I was subleasing, wanted to know why I did not tell them or pay the sublet fee. To me thought never crossed my mind. Quick show of my utility bills still in my name and fact I was coming back solved issue. But when board sticks their nose in it is funny business to overly regulate rentals. A necessary evil quite often.
Renting your unit and being on the board are perfectly fine in most cases. The Board does not represent themselves but the building as a whole.
My condo has a board of 5.
4 board members live in the building year round and one rents his unit. The building is around 80% primary residences.
I would think that since roughly 20 percent of building rents it is a good set up as that 20% has someone representing them on the board.
Renting is a hot topic. Also what is a rental is also a hot topic. Year round tenant, winter tenant, summer tenant, AirBNB, family members using unit when owner is not there, kids home from college, Girl Friends, Boyfriends, room mates.
Years ago when I was single I let my younger single sister stay at my place for a few months while I was on a long business trip. The coop claimed I was subleasing, wanted to know why I did not tell them or pay the sublet fee. To me thought never crossed my mind. Quick show of my utility bills still in my name and fact I was coming back solved issue. But when board sticks their nose in it is funny business to overly regulate rentals. A necessary evil quite often.
We had the same thing with two brothers in our family, one owned, one visited while the other was out of town. They looked alike so the visiting brother got some funny looks until someone realized he was not the owner brother and caused a fuss.
My opinion on the question about whether an investor/owner on the HOA board shouldn't vote on issues pertaining to rules regarding renters in the community is NO -- all board members should vote on all issues.
If you used the reverse logic, you would be asking all HOA board members who reside in their units not to vote on any rules at all because they pertain to them.
It's dumb for HOA's and COA's to be ruled by boards. Boards have inherent bias, and over the long run tend to consist of those who have time for them, not those who can do the job best. Instead, they should be run by professional property managers. The whole membership of the community should vote on whether to replace those property managers periodically. The voting should be on a website, which should have all information openly disclosed, to prevent the possibility of corruption, embezzlement, etc. That information should include all the details of the association's finances, including every bill and payment. For example if the association imposes fines on some homeowners and not others, for the same offenses, it should be clear from the financial details available to everyone. Or if the association hires the manager's brother to do major work, that should be equally clear, from the same financial details. But instead of doing it in a civilized manner like that, we have boards that operate in secret, obfuscate their financial details, and mismanage almost everything. And nobody cares, because nobody has time to care. The whole purpose of a board is to delegate decisions to people who have time for those decisions. But those who have time are exactly those who shouldn't be doing that work. If they were good at it, they would be using those skills elsewhere, and wouldn't have time.
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