G.M. from South Carolina writes:
Dear Mister Condo,
I own a condo in a small complex in downtown Charleston, and there are two other condos within the same complex. I’ve rented out my condo to a new individual who moved into the apartment in March. On Friday past, I receive an e-mail from the landlord of the condo below mine, requesting I “get rid of my tenant due to nuisance behavior and possible illegal activities”. Being duly concerned I contacted this landlord to find out what was going on, specifically outlining concern for all tenants and asking what proof he has of these infractions. I told him that if indeed this was the case, then he should call the police with our full support. We agreed that he was going to visit with his tenant in the next 24 hours and discuss the situation with her. A day went by, and we later get an e-mail stating they were able to “deescalate” the situation for the time being and that they were going to consult with “Livability Charleston Government Staff” who are supposedly the controlling department for these types of situations. I’ve never heard of this organization and can’t seem to find anything about them
As it stands, we’re still unaware of what these nuisance/illegal activity claims are based upon, but my concern is that the landlord is the chairman of the governing HOA. Does this give him power to write to me and tell me to “get rid of” my tenant when there seems to be absolutely no grounds? I was also concerned that he started mentioning “the liability lies with you”. I still don’t really know what he meant by this and frankly I find it quite baffling. Are you able to shed any light on this? it seems strange that without proof of infractions, I’m merely being told by the HOA to evict my tenant because his tenant has had some type of disagreement which as yet, is unknown?
Mister Condo replies:
G.M., I am sorry that you have to deal with an overreaching HOA Board President. No, he has no special powers to force you to evict your tenant. Yes, he can alert you to potential problems. Eviction is a lengthy and legal process. Your tenant has rights. You have rights. The association has the right to enforce its covenants, which may include eviction, but it isn’t done with a phone call. If you consult your governing documents, you can read all about the rights of landlords (you), renters (your tenant), and the role of the Board with regards to governing both. I know nothing of the Livability Charleston Government Staff and their powers to enforce city ordinances. A quick look at their website – https://www.charleston-sc.gov/1380/Livability-Tourism would indicate that they do have some powers but even they would be bound by the law. If your tenant is doing something illegal, you would be wise to know what the issue is. If their activity puts you or your investment at risk and your lease agreement allows for an eviction based on such activities, I would suggest you speak with your own attorney to see what your options are. If it is a 12-month lease, sometimes your best option is to allow the lease to expire and not offer renewal. All the best!
Investor owners who get on the board sometimes try to use that leverage wrongfully. A board member should be disclosing all (potential) conflicts of interest, esp those in which they have a direct financial benefit. A board member should not be representing both sides (ie wearing their “unit owner hat,” and at the same time “board member hat”), the board member should be recusing himself from being involved with influencing the board’s discussion or handling a matter involving his own tenant. (This specific type of conflict – that with a direct financial benefit – can be a big “no no” with D&O coverage issues, also.) I would suggest a unit owner who becomes an investor in a HOA have a retained attorney who is familiar with your ownership(s). Have them fire off a response (“back off” letter, a warning shot over the bow, this should cause this board chair to realize he can’t misuse his powers on you). This board member shows heavy handedness, by already bringing up liability, etc., and has kept you in the dark by not fairly communicating with you the actual underlying issue (it could possibly be that it is so minor he doesn’t want to reveal). The big picture is boards of directors in HOAs should adopt a conflict of interest policy, also, at point of becoming a director, to sign a conflict of interest statement that informs them of their duty to disclose and includes representative examples, and must list all current conflicts and agree to disclose any forthcoming. Statements should be signed annually to help demonstrate the association is actively regulating conflicts. A conflict in which a director has a conflict with a direct financial benefit (ie his tenant’s rental payments, etc) cannot have that conflict waived or fenced. Any policy or conflict statements to be used routinely should be drafted and/or reviewed by a knowledgeable HOA attorney. I would suggest asking your tenant, in an objective way, what it is that someone is complaining about.
Great advice, R.M.! Thank you!