J.G. from Connecticut writes:
Dear Mister Condo,
Can a condo association set the percentage of renters living in the complex? Example: 450 total units with 10 % being renters.? This item is documented in our bylaws /sales package.
Mister Condo replies:
J.G., they sure can! In fact, many associations need to do this so that FHA-backed mortgage and other financial instruments are available to the people who own or are looking to purchase into the association. Additionally, in an association that is predominantly owner-occupied, having a rental cap can help the community maintain a better living condition for the owners. Like it or not, communities that have higher percentages of renters tend to become run down quickly due to the fact that the renters have no long-term interest in the upkeep and maintenance of the community. Limiting the number of rental units is a good tactic for limiting the wear and tear that comes from having a higher percentage of renters. Rental caps have to be documented in the governing documents which is why you will see them in the by-laws and resale packages. If an investor purchased a unit and the rental cap wasn’t disclosed ahead of time, there would be a real problem for both the owner and the association. I am glad that your condo is doing it by the book. All the best!