Tag Archives: Renting

Condo Association Approaching 50% Rental Mark

H.W. from Fairfield County writes:

Dear Mister Condo,

Our 306-unit condo is now at 48% rentals. The Board relies on a manager to do this type of work. What will happen when we get to 50%?

Mister Condo replies:

H.W., thank you for writing. There are many challenges to managing and living in a community with a high rental rate. For starters, fewer owner occupied units usually means that fewer of the residents have a long-term concern for the well-being and stability of the community. After all, they have no investment in the property and are likely to leave when it suits them by simply not renewing their lease. Many associations with high rental rates also report difficulty in enforcing parking and other rules. Again, some renters (certainly not all) tend not to pay close attention to the rules of the association. The biggest challenge the community may face is qualification for FHA-backed mortgages, which dominate the mortgage world. Many condominiums will lose their eligibility for FHA-backed mortgages if the community becomes more than 50% rental units. FHA changes its rules from time to time so you should really check with a mortgage company that specializes in FHA-backed mortgages for an idea of the impact your association may face if/when the 50% rental threshold is surpassed. I found an excellent article on the subject at Housingwire.com. You can read it here: https://www.housingwire.com/articles/38374-fha-lowers-owner-occupancy-requirements-for-condos. All the best!

Cantankerous Condo Renter Unhappy at Condo

B.C. from Florida writes:

Dear Mister Condo,

The condo president is a nightmare. The Board is a nightmare. This condo is intentionally making it difficult for guests to get in and out of the building. The intention is increased security but it is just increased harassment. If a nurse or CNA visits every day, calling the gate every day is absurd. They get too many phone calls and don’t have time to make parking passes for the number of visitors we have during the winter. Disabled parking is not required for condos in FL — but they have a sign saying that if a resident parks in a guest spot (even with a handicap sticker) the car will be towed. There is a sign saying I can be fined for drinking water while swimming. Funny thing is….they have no one to enforce any rules or call the tow company so the folks who rent here ignore the rules and the board and work everything out with the parking amongst ourselves. I cannot be evicted by a condo board and my landlord will never evict me. They can’t “put pressure” on the landlord because he will ignore them. I have spoken with the President of the Rec Center and he sees my side but refuses to hire his incompetent manager who is the cause of ALL problems here. I never agreed to follow any rules. I don’t even have a written lease anymore….because my landlord trusts me. If the Board of this condo refuses to let in my guests, I will either have a panic attack and call the police or I will insult someone who will then hit me and then I will file battery charges. Can I file a law suit against the Condo Board for discrimination against the disabled? The manager is hated here…how do I get her fired without ending up in jail myself?

Mister Condo replies:

B.C., I can’t for the life of me understand why you would live in a place that is so out of touch with your living needs. A condominium is not an assisted living center and the association is under no obligation to change its rules to suit your needs. You, and everyone else, need to follow the rules of the community. The Board, democratically elected by all unit owners, including your landlord, conducts the business of the association as it sees fit but does have to answer to unit owners at annual elections. If they aren’t doing their jobs they are likely to be voted off the Board. That doesn’t seem to be the case from what you have told me. Your lack of lease agreement with your landlord does not exempt you from the rules of the community. In fact, my guess is that your landlord is in violation of the rules for renting units by not having a written agreement with you on file with the association. You claim you can’t be evicted by the association but without a valid rental agreement to defend yourself, I am not so sure you are correct. You would be unwise to do anything illegal such as verbally assault any of the Board members or Property Manager at your condo. You would do well to speak with your own attorney and see what, if any, legal rights you have. From what you have told me here, I don’t see where any laws are being violated but I am not an attorney and offer no legal advice here. You might consider moving to a more suitable community when your lease ends, whenever that is (who knows with an unwritten lease?). Whatever you decide to do, I wish you a happier condo life experience. All the best!

Can Condo Association Evict an Owner’s Tenant?

G.Q. from New Haven County writes:

Dear Mister Condo,

Can a condo association evict an owner’s tenant?

Mister Condo replies:

G.Q., depending on the by-laws of the association, it is quite possible although it is not a simple process. State laws and local laws also come into play. The by-laws spell out acceptable use of condo units. Let’s say a unit is being used for an illegal activity, like producing drugs. The association has the right to protect itself from this illegal activity and can take actions that would lead to an eviction. If the offense is far less serious like the renter plays loud music, the association can take steps against the unit owner, which might motivate the owner to evict the tenant. Eviction is a serious matter and should be handled with the assistance of an attorney. If the association has an attorney, this is a perfect example of when to use him or her. Of course, the ideal situation is for the tenant to act in accordance with association rules, which the tenant typically agrees to when they sign their lease. All the best!

Insurance Runaround Leaves Condo Renter with Uncovered Losses

P.P. from New Haven County writes:

Dear Mister Condo,

I was a tenant in a condo that was damaged by water that entered the unit causing complete damage to 800 square feet of the hardwood flooring, Sheetrock and our personal property/furniture. Since owners’ insurance approved full compensation for damage, cause described as ice dam. Our tenants’ insurance declined claim because of owners’ insurance ‘ice dam’. Upon demo of floors and walls it was discovered that the damage was long term and was the result of gross negligence. It was discovered that incorrect installation of replacement windows which cause a gap under the windows causing water to enter the full length of the wall. Our furniture against that wall was no only water damaged, but infested with mold. A total loss. The condo association also received insurance money to pay the owners deductible and repair the gap and siding. Our tenant’s insurance refuses to revise the original decline. Neither the owner, who had the Windows replaced without a permit from the condo, nor the condo association is taking responsibility for the cost of our damage. We continued to pay rent during the three-months-time to repair, without access to the main level of the house. We’ve contacted the state of CT INSURANCE DEPARTMENT and representative simply sends us the original ice dam determination from Liberty Mutual. We are in contact with the association’s insurance who points to owner’s liability so points back at negligence of association. We have lost 50% of our furniture and damage to the rest. Where can we go from here?

Mister Condo replies:

P.P., I am sorry for all of your problems. As a tenant, your renter’s insurance should be your primary method of recovery for loss such as this. Unfortunately, your insurer is looking to shift the burden and has pointed a finger at the association, delaying your claim and leaving you stuck in the middle. For starters, I would not renew my lease when it is up. You have identified enough underlying problems that you would be wise to seek a new rental. Your claim of loss is most likely going to be against your Landlord and his claim will be against the association. However, before you get into the expense and ongoing legal battle with insurers, your landlord, and the condo association, you need solid legal advice from a local attorney who can tell you what to expect. I would think your insurer is going to be your best bet for getting money back. You paid them a premium and they offered you the coverage. You put in a claim with them and they denied the claim. They are the most direct path to recovering your money. Then, they can take on the expense of suing the association’s insurance company for damage caused by negligence, and so on. If you try to tackle all of these issues on your own, you could end up spending thousands of dollars with little to show for it at the end of the day. At least with your own insurer, you can demonstrate the coverage you had in place at the time of the loss. They have their own attorneys who may be willing to settle with you to avoid a lawsuit. Speak to an attorney today to get a legal opinion on your best course of action. Good luck!

Condo Rental Blues

A.B. from outside of Connecticut writes:

Dear Mister Condo,

I rent a unit in an 8-family condo building. The day I got my keys, three neighbors knocked on my door and told me the previous tenant moved out because they called the police on her four times for noise. They proceeded to list noise complaints and told me they could hear me already (I was cleaning! I had not moved in yet). They told me the previous tenants talked on the phone loudly after 10pm, banged the water off and on, and slammed the cupboards – this is why they called the police.

Now I’ve been living here for two months and I can hear everything the complaining neighbor (below me) speaks – clearly – and I can hear her snoring. I don’t think there is sound proofing if I can hear her talking through my floor. Then this morning at 6:00 am the neighbor across the hall had a fight with an unknown woman on the landing outside my door and I was a bit frightened.

I told my landlord about their initial complaints. Should I tell him about the fight? He lied to me as to the reason the previous tenants left (he told me they broke the lease because they had financial troubles) when the real reason was the downstairs neighbor called the police on them four times and they were essentially forced out. I am in a year lease and I am thinking I made a mistake moving here. Advice?

Mister Condo replies:

A.B., I am sorry that your new rental is looking less than ideal. The reality is you are a new tenant and a new member of this close-knit community. They have already shown you some of their quirks and you may or may not fit in with this group of folks. The good news is that you will know in short order if you will want to stay there more than 12 months. If you enjoy your experience, you’re good to go. If you find it unenjoyable, there is no need to renew your lease. If you let your landlord know you aren’t planning on renewing your lease and that you are even willing to leave the lease early, your landlord can begin marketing the unit sooner and may find a renter to replace you before your lease ends, which sounds to me like that is what you want. If you voluntarily break your lease without your landlord’s agreement, you may still be on the hook for your rent and lose your security deposit. That isn’t what you want. My advice is to give it a try. If it doesn’t work out, try working with your landlord to end your lease early. If that doesn’t work out, don’t renew your lease and hope for a better group of neighbors next time. Good luck!

Apartment to Condo; Now Back to Apartment

N.P. from Illinois writes:

Dear Mister Condo,

We bought a condo in 2010 in a large apartment complex that was going condo right when the recession hit. It was an investment and we rent it out. Not many condos were sold, the prices never dropped in the recession. Even now many (not sure how many) of the units are still rented out by the developer. Now we have received a letter saying that the developer wants to buy back our unit and NOT be a condo development. The letter is friendly, and says nothing about what happens if we don’t want to sell. We’ve had one tenant in there this entire time (with different roommates) and been very happy with this investment. Do you know what the laws are regarding this situation?

Mister Condo replies:

N.P., dissolution of condominiums varies from state to state. Just as when the project filed to become a condo, a new filing will be made to dissolve it. I am not familiar with the specifics of Illinois law regarding the dissolution of a condo but I imagine it is similar to other states. Typically, unless court ordered (which happens when an association fails or defaults), a petitioner sends in the required paperwork to dissolve the association. There is usually a majority or full 100% agreement required by all with an interest in the association. That can include mortgage holders as well as unit owners. This is a very legal action and you will most certainly wish to hire an attorney to guide you.

I found this link on dissolution of non-profit corporations in your state to be of use: http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=080501050HArt%2E+12&ActID=2280&ChapterID=65&SeqStart=10900000&SeqEnd=12900000

I can see where the developer wants to stop the bleeding and the polite letter was likely an opening attempt to gauge your interest. The reality is that if there are many unsold units in the condo, it may fail due to lack of funds from common fees to pay expenses. If that happens, you could see a creditor sue the association and have a judge dissolve the association or put it in receivership. You don’t want that as that could be quite costly for all involved. If the developer wants to convert back to apartments, you should look into how best to protect your investment. It is likely that a smooth transition could actually help you out in the long run. Good luck!

Who Sets the Condo’s Percentage of Rental Units?

J.H. from New Haven County writes:

Dear Mister Condo,

Supposedly, the percentage of renters in a Connecticut condo association has been changed to allow up to 50% of the units to be rented. If this is correct, where can I find a copy of the law, and who sponsored it? The more renters allowed will increase our insurance costs, change the demographics of the community and discourage most people from buying units in the complex.

Mister Condo replies:

J.H., I am not aware of any law in our state that allows up to 50% of units in any condo association to be rented. Rental restrictions or rental caps are usually outlined in the condominium’s governing documents, if at all. Many associations refer to FHA guidelines (set by the federal government, not the states) so they can maintain or obtain FHA qualification for mortgages to be obtained by unit owners. If associations allow more rentals than the FHA guidelines call for, it becomes unlikely that unit owners will be able to get mortgages within the association as the association as a whole becomes ineligible in the eyes of the FHA, and, therefore, those banks that offer FHA-backed mortgages. All that being said, you need to look at your governance documents to see what, if anything, they say about limiting the percentage of rental units. If the documents are silent on the subject (many are), you might like to see what restrictions may have been placed on the units over the years. Keep in mind that the entire body of unit owners needs to vote on such restrictions. I agree with your assessment of what happens when communities become dominated with rentals However, there are many community associations where investors have purchased a majority of units with the only intention is to rent them out and eventually sell the units at a profit. If you live in such an association, rental restrictions would be hard to implement. Good luck!

Costly Condo Leasing Restrictions

R.F. from Texas writes:

Dear Mister Condo,

Years ago (before I bought my condo in Texas) the HOA passed a Standard Operating Procedure (SOP) and made it mandatory that all rentals go through their onsite management. If I rent my unit out on my own I must pay the full 40% fees + a penalty. Is this even legal for them to force me to use them?

Mister Condo replies:

R.F., leasing restrictions such as the one you have described are not uncommon. Using a particular agent for leasing agreements is one way the Board of the HOA can be certain that all leasing rules and regulations are adhered to. The penalty for not leasing through their agent is designed to discourage the practice and, at a 40% fee plus penalties, I imagine it is particularly effective. While it does seem unfair that you don’t have any other reasonable option for renting your unit other than by using the onsite management company, my guess is that the onsite management company is an excellent and efficient way to keep your unit rented out. Since anyone interested in renting will ultimately end up at their doorstep, there is a greater likelihood that they will rent it out quicker and to a qualified renter. All the best!

Providing a Copy of Condo Lease Agreement is S.O.P.

G.D. from New York writes:

Dear Mister Condo,

My question is “Are we, as owners, required to give a copy of our lease agreement with a tenant and her Social Services information to the board?” It’s not a co-op. We own our unit and I feel her information is not their business. Am I right? Thank you.

Mister Condo replies:

G.D., I do not think that you are correct in this matter. Keep in mind that I am not an attorney nor am I an expert in New York community association law. For a legal opinion, kindly consult with a locally qualified attorney. As a general rule, the Board of any common interest community has a right and a need to know who is living in their buildings. There are generally rules on leasing that require a unit owner who is leasing their unit(s) to provide a copy of the lease with all parties named to the Board or managing agent so that there is a record of who does and doesn’t belong on the property. There are sometimes restrictions on the use of common amenities on leased units as well and the lease is the legal document that may allow a tenant to use things like a workout room or community pool or clubhouse. The lease may also restrict the owner of the unit from using these same amenities during the time that the lease is in effect. There are also insurance issues, emergency contact issues, and more that require copy of the lease to be in the Board or managing agent’s possession. There are also restrictions on short-term rentals or AirBnB type arrangements. Providing a copy of the lease also shows that you are not in violation of the covenants you agreed to when you purchased. Finally, there are many common interest communities that place a cap or limit on the number of units available for lease at any given time. By providing a copy of the lease, you are demonstrating that you are not in violation of these provisions as well. If you find that the Board or managing agent has used any of the information in the lease in an inappropriate manner, you may have recourse. Other than that, providing a copy of the lease is really in the best interest of you, your tenant, and the association. Good luck!

Is Condo Board Responsible to Provide Onsite Parking?

S.K. from outside of Connecticut writes:

Dear Mister Condo,

Are condominium boards required to provide on-site parking for residents or renters?

Mister Condo replies:

S.K., no, on-site parking is a function of use of the common areas, which are under the control of the Board as they have been elected by the association to manage the common assets of the association. Many communities, especially urban-based associations, simply don’t own any land or garage space where parking can be provided, leaving the job of finding a or renting a parking space up to the unit owners or renters. Unless otherwise stated in your deed or governing documents, the Board is not obligated to provide this amenity. Good luck!