Rogue Renters: What If You Punished the Investor Owner's Other Tenants, Too?
HOAleader.com - Tip of the
Week - August 18, 2023
It's a problem everywhere—investor owners of multiple units in a condo or HOA who are pretty lax in landlording. Maybe some of their tenants are fine, but others are constant rulebreakers.
In this week's tip, we share with you a potential solution proposed by an HOA board member wondering if a new approach would be permissible.
Here's that board member's question: "One of the goals for my community is to have owners of rental homes inspect their properties monthly at a minimum. Our staff invests too much time making sure these companies are in compliance.
"Why not consider all the rentals owned by company X as a group? When one home goes out of compliance, all properties owned by the company are impacted. In our case, we can deny access to our clubhouse facilities. For example, X investor owns 14 properties in our community. Seven are currently out of compliance. Why allow any of their customers access to
amenities?
"We already deactivate fobs when a specific address is out of compliance and the home has gone to the second stage of enforcement. I had our community manager contact the large rental companies and request a list of their rentals
in our community. They will provide this information if asked, at least they have in the past."
We checked in with four of our experts, and three were uncomfortable with this idea. The fourth says the law isn't clear, but this
might be possible—though it could face a legal challenge.
"In Colorado, it has to be in your governing documents for you to be able to deny access to the
common elements," reports Elina Gilbert, a shareholder at Altitude Community Law in Lakewood, Colo., who has specialized in community association law for 23 years. "If it's in your documents, it usually says the condo or HOA can deny those owners the right to vote if they're delinquent or otherwise in violation of their obligations."
But penalizing renters of properties not in violation simply because their owner has another property with renters out of compliance? "No, you can't do that," says Gilbert. "You can cut off access for the owner or resident of the unit that's in violation. But if there's no violation associated with a particular unit, you can't do that.
"You can't do that for anyone who's not doing anything wrong," she adds. "Regardless of who owns the unit, the action has to be associated with a violation for each unit."
Best regards,
Matt Humphrey
President