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HOA Rules and Tenants

Some homeowner and condo association rules prohibit rentals.  Be sure to review the rules and bylaws before putting a property up for rent, or before accepting a rental for property management. If in doubt about the exact language, consult with an attorney.  The luxury condos Turquoise Towers, in Orange Beach, had a rule prohibiting anything except residential use. The rule was intended to make it illegal to rent someone’s unit as a vacation rental. But, the exact language did not accomplish that. A residential rental is still a residential use.  A resort company was able to buy up 50+ units shortly after the crash, making many unhappy condo owners even more unhappy. An attorney can provide guidance if you are in doubt.

Landlords of properties subject to HOA rules or condo association rules should always provide a copy of those rules to the tenant, and include a lease provision that the tenant will obey the rules.  A tenant who violates the rules could subject the owner to fines, liens, loss of rights, attorneys fees and, possibly, loss of property through foreclosure of the lien.  It is not a defense that the owner did not know of the unauthorized activities. It is not a defense that the owner specifically prohibited those activities in the lease.  If the tenant causes problems, the owner will pay the consequences.

This means the property managers who handle SFR and condo rentals will have to be completely familiar with the rules for the various associations that might be relevant to a property. It might be wise to meet with the manager for the association, and request a warning letter or phone call before adverse action is taken. If they agree, be sure to get it in writing, or write a “This is to confirm our conversation that ….” letter to the HOA contact. Otherwise, if they fail to provide the warning and go straight to sanctions, you will be in a “he-said-she-said” situation.

What do you think?