HOAleader.com - Tip of the Week - June 7, 2019
Published: Fri, 06/07/19
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7 Provisions You Might Want to Tuck Into Your Condo/HOA Rental Policy
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In this week's tip, we get you started on drafting a policy governing rentals so that everybody is on the same page when it comes to what's required and permitted when owners do just that.
State laws will differ on whether your condo or HOA can limit rentals and to what extent, as will governing documents. So as our experts recently explained at an HOAleader.com webinar on rentals, there's no template rental policy that would be helpful across the nation.
No fear. We can still help.
However, before you begin drafting a rental policy, one of our experts wants to be sure you have, and do, some necessary groundwork.
"My first recommendation when it comes to rental policies is that boards really need to have the foundational understanding of what's allowed and not before they get into the how or whether every specific provision is allowed," explains Scott E. Pointner, an attorney at Rathje & Woodward in Wheaton, Ill., who's been representing HOAs and condos—ranging from 4-unit condos to 1,800-plus unit lake associations—for nearly 20 years.
"There are a lot of people who really don't understand a lot of the underlying issues," he adds. "The first thing is to understand that we're talking about a spectrum. At one extreme is an absolute, all-out ban on rentals, and at the other end, it's wide open with no restrictions.
"Somewhere in the middle, there are tipping points that have been triggered, and now you're into the illegal or improper side rather than the permitted side of rentals," he states. "I always recommend they don't just assume that whatever policy you have in place is allowed. Don't assume it's legal because it may not be."
Pointner offers a 1992 Illinois case, Westfield Homes v. Harrick, to help board members appreciate the issues to which he's referring. "I find that this case is one of the most informative cases out there, even though it's not a rental case," he says. "It's tremendously helpful on a number of different points. The bottom-line takeaway is that if the underlying declaration contemplated that swimming pools would be allowed, and it allowed the board to regulate them, for the board to regulate them to such an extent that they were practically banned, that was inconsistent with the underlying declaration.
"Extrapolate that to the concept of rental policies," explains Pointner. "If you have in your declaration provisions that contemplate that rentals will be allowed, but your rental policy is inconsistent with that because it's too restrictive, you shouldn't have those policies even if they'd be permissible in another association."
Finally, Pointner notes that this issue is one for which a restriction adopted by your owners might be permissible, but if the same provision were adopted by only the board, it may not be enforceable.
Find out what Pointner means, and dig into the meat of our experts' recommendations, in our new article:
https://www.hoaleader.com/members/3927.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Florida's New Law on Term Limits Is Muddy; Could Your Condo/HOA Adopt Similar Restrictions?
There's a new Florida law limiting the length that condo board members can serve. But it's got many people confused because it's not clear when the term-limit time clock begins under its provisions. What's a Florida condo board to do? And what about boards outside Florida? Is it wise to adopt term limits?
Click here to read full article:
https://www.hoaleader.com/members/Floridas-New-Law-on-Term-Limits-Muddy-Could-Your-CondoHOA-Adopt-Similar-Restrictions.cfm
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Oops! When You've Been Doing Things Wrong at Your Condo/HOA for Years
An HOAleader.com reader has an interesting dilemma. "We have a small subdivision in Idaho. The developer designated a small common area when the property was originally developed. Due to a recent survey done by a new lot owner, it was discovered that the majority of the area isn't owned by the HOA but by the individual lot owners it runs across of. Can the HOA continue to force members to pay dues and use the funds for the maintenance of the non-owned area, even if it's in the CC&Rs?"
Click here to read full article:
https://www.hoaleader.com/members/Oops-When-Youve-Been-Doing-Things-Wrong-at-Your-CondoHOA-for-Years.cfm
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What to Know About California's Proposed Law with Big Changes on How Condos/HOAs Operate
If at first you don't succeed, try, try again. That must be the motto of California lawmakers, who've introduced legislation that would radically change the election process at condos and HOAs.
Click here to read full article:
https://www.hoaleader.com/members/What-Know-About-Californias-Proposed-Law-with-Big-Changes-on-How-CondosHOAs-Operate.cfm
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What to Know About Various Ways to Accept Payments from Condo/HOA Owners
Is there a difference between accepting "online payments" and credit card payments? Are there programs that help associations process online payments without cost? And finally, one of our experts recently said that he knows association management companies that accept cash from homeowners. Is that common? A good idea? Here, our experts talk about best practices when you're accepting payments from homeowners.
Click here to read full article:
https://www.hoaleader.com/members/What-Know-About-Various-Ways-Accept-Payments-from-CondoHOA-Owners.cfm
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Does Your Condo/HOA Need Extra Insurance If You Permit Rentals?
A Virginia Supreme Court case raises an interesting question for community associations: When are they liable -- if ever -- for injuries sustained by guests of an individual owner's home during a short-term rental?
Click here to read full article:
https://www.hoaleader.com/members/Does-Your-CondoHOA-Need-Extra-Insurance-You-Permit-Rentals.cfm
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