55+ communities and developer (or successor-to-developer) fees

[lvoc]

In Nevada we have our own versions.

First an HOA cannot change the rental requirement for an existing owner. It can modify the CC&Rs by whatever vote that takes to ban or limit renting...but it impacts only future owners.

Next any rental less than a month is consider a hotel and must conform to hotel laws. Particularly must register as a hotel and must collect room taxes. No one ever does leading to interesting neighbor versus neighbor versus municipality litigation. Can get particularly nasty on certain very large properties in gated communities.

In general non revenue use is allowed though usage may not extend to community facilities.

Finally one can always rent a room and it is probably not possible for any government or association to ban such rentals. We still lack case law on this one for the HOA though we do have legal opinions considered quite strong.

[Robyn55]

Originally Posted by lvoc

In Nevada we have our own versions.

First an HOA cannot change the rental requirement for an existing owner. It can modify the CC&Rs by whatever vote that takes to ban or limit renting...but it impacts only future owners.

Next any rental less than a month is consider a hotel and must conform to hotel laws. Particularly must register as a hotel and must collect room taxes. No one ever does leading to interesting neighbor versus neighbor versus municipality litigation. Can get particularly nasty on certain very large properties in gated communities.

In general non revenue use is allowed though usage may not extend to community facilities.

Finally one can always rent a room and it is probably not possible for any government or association to ban such rentals. We still lack case law on this one for the HOA though we do have legal opinions considered quite strong.

Can you provide any links for this - whether they're statutes or court decisions? Especially WRT the retroactivity issue. Not that I doubt you. But - just because you're so sure (and I'm interested) - you should have ready access to links. Robyn

[lvoc]

Originally Posted by Robyn55

Can you provide any links for this - whether they're statutes or court decisions? Especially WRT the retroactivity issue. Not that I doubt you. But - just because you're so sure (and I'm interested) - you should have ready access to links. Robyn

I will try over the weekend. I am really quoting from two sources...I am an RE Agent and have sold two or three condos where the rental issue came up. I also served on a community citizens task force for Clark County where we were working the question of nursing homes and limitations on residents per dwelling. The municipal thing had support from the County Lawyer and his staff and a high powered consultant out of the mid west. One of those fun task forces where the imprint of fingernails in the edge of the conference table were visible at the end.

[City__Datarer]

Something that, if I'm understanding correctly, is a bit different from the type of grandfathering versus retroactivity that has been discussed--an interesting twist--is found in Florida Statute 718.110(13).

The page I saw this on was a search result, so I'm not sure if the link will hold (and of course, if someone is reading this at a future date, the info may have changed), but I'll try posting the link:

Statutes & Constitution :View Statutes : Online Sunshine

(I selected year 2013, the latest year available in the selection box at the time I'm doing the search.)

718.110(13) is almost at the bottom of this very long page.

This is in the section for condominiums; I didn't look up whether there's any info for HOAs.

As of tonight, when I pulled up the page, it reads:

"An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment."

I should say I have no idea whether the page is current or is applicable to anyone's particular situation; I'm not an attorney or real estate professional and so am not giving legal or professional advice or information, and no one should rely on what I'm posting in their decision making. I sometimes misunderstand things, and even if I do correctly read and understand something, I don't have the background and haven't done the research that would be required to know if there's something else somewhere (beyond any particular paragraph I'm looking at) that would trump/change/supersede/reverse it. I'm just someone who's owned a couple of condos in the past and is considering (not without considerable trepidation) doing so again and so tries to be an informed consumer as much as possible. So people should consult an attorney for legal info/interpretation.

In my opinion, since joint ventures (like condos and HOAs) can only work optimally for everyone over the long term if people put fair-mindedness above expedience, the original documents (absent compelling circumstances) are probably the best anchor, especially in a situation where a change would result in some residents winning and some losing. As much as I personally (as an owner occupant) would have benefitted if my last condo had had stricter rental guidelines (in fact, I'd still own it and wouldn't be posting all the time on City-Data about my search for a home!), I nevertheless wouldn't have wanted to see a rules change as I don't think it's right (I'm speaking golden-rule right) to pull the rug out from under someone who bought under certain existing documents that conferred specific use-of-property rights.

But I thought this was an interesting approach (trying to find a middle ground to achieve some mitigation of damage in situations where this does occur).

[Robyn55]

Thanks for the Florida link. Didn't go back to see exactly when it was incorporated into the Florida condo law - but it's been there at least a few years (it wasn't in the 2013 changes). Note that it's a condo law - not a HOA law. But it would make sense if applied in HOAs too. Perhaps the legislature will get around to passing something similar in the HOA laws in the near future (the HOA laws are pretty much treated like a "step child" in Florida - which is unfortunate).

BTW - what didn't you like about the rental situation in your previous place? Robyn

[Robyn55]

Originally Posted by lvoc

In Nevada we have our own versions.

First an HOA cannot change the rental requirement for an existing owner. It can modify the CC&Rs by whatever vote that takes to ban or limit renting...but it impacts only future owners.

Next any rental less than a month is consider a hotel and must conform to hotel laws. Particularly must register as a hotel and must collect room taxes. No one ever does leading to interesting neighbor versus neighbor versus municipality litigation. Can get particularly nasty on certain very large properties in gated communities.

In general non revenue use is allowed though usage may not extend to community facilities.

Finally one can always rent a room and it is probably not possible for any government or association to ban such rentals. We still lack case law on this one for the HOA though we do have legal opinions considered quite strong.

In Florida - the sales tax rules apply to rentals that are < 6 months. But short term rentals (like by the week) aren't that common statewide. We see them here when it comes to oceanfront places that people are renting for summer beach vacations. And there are some "event" rentals (like for the TPC). For the most part - people will rent in south Florida for the "season" (and - even if the "season" is 4-5 months - the rental will be 6 months).

In our HOA - rentals are usually by the year - or sometimes the school year. There aren't many of them - and they go pretty fast. Because the main attraction here for most people is our county school system - and our school system is very strict in terms of enforcing residence requirements. The only time we had "rental issues" here was quite a while ago - like the late 1990's - when the real estate market was slumping. And some people trying to sell used "house sitters" (often groups of unrelated people) after they had moved - but before they sold. The market here has changed a lot since then - and I haven't heard of any house sitters for a long time. In terms of renting rooms - about the only time you'll see that where I live is when adult kids are moving back in with mom and dad. Not cause for complaint. Robyn

[City__Datarer]

Originally Posted by Robyn55

Thanks for the Florida link. Didn't go back to see exactly when it was incorporated into the Florida condo law - but it's been there at least a few years (it wasn't in the 2013 changes). Note that it's a condo law - not a HOA law. But it would make sense if applied in HOAs too. Perhaps the legislature will get around to passing something similar in the HOA laws in the near future (the HOA laws are pretty much treated like a "step child" in Florida - which is unfortunate).

BTW - what didn't you like about the rental situation in your previous place? Robyn [boldface added]

When I moved in, the property was modest but nicely maintained with pleasant, attractively landscaped grounds. I felt lucky to be there. Then, when the real estate bubble burst, there were quite a few foreclosures (and it could take literally years from the time an owner stopped paying to a completed foreclosure where a new owner who would pay took over). Some of the owners who went into foreclosure had paid bubble prices; others had bought before the bubble but did cash-out refinancing when prices skyrocketed. During that time, the maintenance suffered because of the nonpaying owners.

I don't know the stats, and everyone is an individual, but my guess is that on average, owner occupants are more likely to keep paying the mortgage (and condo dues) if they possibly can, even if very underwater, because it's their home that they're emotionally attached to (although of course the real estate decline had ripple effects that caused a lot of people to lose non-real-estate-related jobs, too, so not everybody who wanted to could manage to keep their homes). On the other hand, many of the investors owned much nicer homes than their rental condo unit and (again, not to generalize, but in some cases--enough cases to hurt the community financially) treated the condo as something to hang onto if/when it could make money for them and to walk away from when it couldn't.

Also it became harder for the investors to find good renters at that time; there were significant quality-of-life issues. I should add that there were lots of really nice renters, too, but people who are negatively impacting their surroundings can have an effect that's out of proportion to their numbers.

I had paid a lot of additional principal for years so was able to sell as a normal sale (not a short sale or foreclosure), but the selling price was far below even the pre-bubble level that I'd bought at. But I just felt it wasn't the right place anymore to plan to spend the rest of my life and I should take the loss.

What I said wasn't meant to paint renters with a broad brush (I'm a responsible renter, and lots of other people are too) but had to do with what unfolded in that particular place (and similar ones--I've read news articles about condos that fared even worse, as far as proportion of foreclosures and livability for the remaining owners, and I've looked more recently again in some of the places that I also had looked at in the early 2000s, and there's been a decline in some areas that were previously not upscale but were very affordable and had pride of ownership and were nice places to live). I hope the economy will improve to where more people can find jobs and places like this will return to being as nice as they were before this real estate fiasco.