I've been working with a local townhouse owner for several months on changing his HOA's by-laws which prohibit the 40 unit owners from renting their townhouses.

The project is adjacent to 2 similar townhouse units by the same builder with no such restrictions and several owners have rented their units in violation of the by-laws.

The unit owner circulated a petition to change the documents and when I met him for a rental management presentation several months ago, he indicated that the change to the by-laws would require that owners utilize a professional property manager to rent their units.

OK!  Smart thinking I told myself.

We had an appointment last Thursday to finalize the management paperwork when the HOA board president called me indicating that the HOA by-law change has hit a snag.  The HOA wants to "control" (his word) who goes into the units and they want to be involved in the tenant selection process.

This was not in the petition paperwork that I reviewed and their involving themselves in the tenant selection is a BIG RED FLAG for FAIR HOUSING!.

I offered to go to a HOA board meeting on Wednesday night and answer questions why the HOA should not be involved and the board president never confirmed the time and place with me for the board meeting.

After much thought, I e-mailed the townhouse owner and suggested that the HOA rules with regard to owners renting their units needs to be reviewed by an attorney and finalized before I wanted to be involved  and that IMHO * the unit owners should have been told the CRITERIA under which they could rent their units BEFORE they signed the petition.  

I applaud the HOA for acknowledging the need to allow owners to have their FULL rights as property owners; however, giving with one hand and taking away with the other may make the HOA even more vulnerable to claims of discrimination and violating tenant and applicant confidentiality if not handled properly.


 

Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.

LandlordWhisperer

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9 Comments on HOA GOOD Idea to allow Rentals*BAD Execution to be Involved in Process

MAY
19
2012
1,527,129 Points 164 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Sounds like they want to be a co-op instead of an HOA.  Have they ever tried to go after the other owners who already rent their property in violation of the current HOA rules?
5:40pm • #1
1,023,498 Points 66 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Self-managed HOAs rarely enforce rules appropriately as they do not have effective, long term management
6:09pm • #2
161,707 Points 2 Featured Posts Attended Rain Camp

I would never buy a home I could not rent. You never know when something could happen and you would need to move. If you can;t sell the ability to rent could keep you out of foreclosure.
6:11pm • #3
795,936 Points Outside Blog

Very interesting.
6:51pm • #4
388,883 Points 21 Featured Posts Outside Blog Called Shot Master

Wallace, when we owned condos, all the origional owners lived there, now several have moved on, but rent them as an investment. People deserve a choice of what to do with their property!
6:52pm • #5
1,023,498 Points 66 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I agree; however, the original documents rule until they are changed.  The owner I was working with was working on one premise and the HOA board was working on another...IMHO the rules under which owners could rent SHOULD have been in the petition so that owners could have viewed and reviewed what they were agreeing to 
7:03pm • #6
MAY
20
2012
433,140 Points 10 Featured Posts Outside Blog

Wallace, an excellent post. I agree with what you wrote above - Self Managed HOAs seldom enforce as they should.
3:28am • #7
649,820 Points 69 Featured Posts Outside Blog Attended Rain Camp

Hi Wallace - The road to hell is paved with good intentions.
3:49am • #8
379,175 Points 5 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Wallace, 

GREAT post, suggested.  We had a situation come up a few years back in our neighborhood, where one neighbor wanted NO rentals and got lawyers to draft a new set of HOA removing your right to rent.  OMG!   At one point as a compromise, the HOA board was suggesting they have approval and that was a huge NO for me.  

We literally canvassed the neighborhood and as folks realized the POWER they would be handing over, it became obvious they could not get it passed.  Thank goodness.  

Even funnier, two of the board members have come to me in the years after that to lease out their homes:-)

All the best, Michelle
12:54pm • #9

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Wallace S. Gibson CPM *

LandlordWhisperer

Charlottesville, VA

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Gibson Management Group, Ltd.

Office Phone: (434) 825-1933

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