HOAleader.com - Tip of the Week - December 2, 2011
Published: Thu, 12/01/11
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Owners Rent? There's a Fee for That!
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In this week's tip, we explain a recent California case that
gives the go-ahead for HOAs to impose a general rental fee
on owners who lease out their property.
After a five-week trial, the court issued its judgment in
Watts v. Oak Shores Community Association on October 11,
2011, likely putting smiles on many HOA board members' faces
throughout California.
Some background: California law says HOAs can't impose
or collect an assessment or fee that exceeds the amount
necessary to defray the costs for which it's levied.
In Watts, the plaintiffs argued that the board imposed
illegal and unreasonable fees on owners who rent their
units on a short-term basis in the gated HOA on the banks
of Lake Nacimiento. The HOA has about 851 lots, 660
of which have homes on them. Of those, about 80 are
occupied by full-time residents. The others, including
those owned by the plaintiffs, are rented, some for
short-term rentals of 90 days or less.
HOA rules state that owners can't rent their home out more
than once in a seven-day period and set maximum numbers of
cars, boats, and other watercraft per home at any one time.
They also impose an annual fee of $325 on owners who rent
their home and a mandatory garbage collection fee, boat and
watercraft fees, building permit fees, and property
transfer fees.
The court held that all the contested bylaws, rules and
regulations serve important interests within the HOA.
Specifically, the court held that the $325 fee on owners
who rent was a valid charge to recover the increased costs
that owners impose on the community when they rent out
their home: "Among other things, short-term renters
generate 'tremendous amounts of garbage' and impose a large
burden on the marina, playgrounds, pool, golf course,
courtesy slips and other areas. Tending to be 'clueless'
when they arrive at Oak Shores, short-term renters seldom
have guidance with respect to the rules, regulations and
fees that are required.
They often need and seek help from OSCA staff. They place
an increased burden on gate staff, office staff and
security staff."
James R. McCormick, Jr., a partner at Peters & Freedman
LLP in Encinitas, Calif., who represents associations,
likes this decision. Find out why, and find out what you
need to know if your HOA isn't in California, in our new
article: http://www.hoaleader.com/members/652.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Litigation: Loose Lips Sink Ships
In this week's tip, we begin to answer a HOAleader.com reader's
question: "How much information must a board of directors divulge
to the HOA when involved in court litigation ... especially when
members of the association are the litigators?"
Click here to read full article:
< http://www.hoaleader.com/public/651.cfm >
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Discussion Forum Follow-Up: What Should You Share about Pending
HOA Litigation?
A HOAleader.com reader asks: "How much information must a board
of directors divulge to the HOA when involved in court litigation
... especially when members of the association are the litigators?
A resident filed suit when the nominations committee and board
of directors determined the resident was not the owner of record/
deed holder ... homeowner. While informing the association about
the suit ... the board of directors were careful about the
information it divulged because it threatened to affect the
outcome of the case. Some homeowners felt the board of directors
had an obligation to reveal all the facts of the case in order
for the association to vote on how the board should proceed:
proceed to court, settlement, countersuits, etc. How much
information must the board of directors divulge to the
association ... especially when the litigators are present?"
Click here to read full article:
< http://www.hoaleader.com/members/650.cfm >
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Is Your HOA Manager Taking Over?
This week's tip will help you determine whether your manager is
too intrusive, not intrusive enough, or behaving just right at
your HOA meetings.
Click here to read full article:
< http://www.hoaleader.com/public/649.cfm >
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Should Managers Attend--and Participate In--HOA Meetings?
On September 4, two community association lawyers contended in a
Los Angeles Times column: "Management employees, like any other
vendor, do not belong at association board meetings. Although
they may be invited to attend, they should not be taking minutes
or offering suggestions on the conduct or content of the meetings.
"
Click here to read full article:
< http://www.hoaleader.com/members/648.cfm >
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Bidding Out HOA Work? RFPs Make the Job Easier and Save Money
In this week's tip, we lend a hand to an HOAleader.com reader.
He says he's sent a request for proposal to six homeowner
association management companies to rebid his HOA's current
contract, and he'd like to know the process his board should
follow in reviewing the bids and awarding the contract.
Click here to read full article:
< http://www.hoaleader.com/public/647.cfm >
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