HOA forcing me to sell my townhome.....

19 Replies

Looking for some advice/suggestion on my current situation with HOA.We(wife and I) bought a townhome in Jan 2018 for 2011,500. Now we want to move to a better school district for our kids and we thought renting the property. The HOA reached back to us and declined mentioning a rental cap on the community of 20% that currently is at 24% blocking us the option to rent. They left us with two options, leave the home empty/vacant or sell. At this point comps are 230,000.00, but property value are keep going up every year. This is mean reason I do not want to sell.

I ask about moving in a family member to the property and got declined. Proposed a short term lease like 6 months, got declined. I requested evidence of rules and covenants are was provided with, but when request the actual list of renters versus home occupied it was never provided. They are stuck on sell the property or leave it vacant. 

Anything else I can do to finally made them allow my property to be rent it out. 

Thanks in advance

Unfortunately with condos and HOA, you have to play by their rules. Are there any rules limiting how long guests can stay? If the documents don't say anything, then have your family move in as guests, not as tenants. They can always pay for the rent on your new home.

You may want to get an attorney to review and see if there is anything you can do. HOA's are notorious for stating things, but then have to back down once attorneys get involved. Best of luck .

This is actually quite common with HOA's. This would have been disclosed in the CC&R's when you originally bought the property, but I know most people don't read those. However, this shows why it's so important to do so if you want to rent the property or think you might ever end up wanting to.

Not much you can do at this point though beyond the options you’ve already been presented with. I wouldn’t say they’re forcing you to sell though. You have the choice to move or not and if you decide to move they aren’t going to allow you to rent it. Same rules as when you bought it. 

The idea behind it is actually to help keep a certain number of owner-occupants and hopefully preserve your property values. (Sounds like yours are doing quite well too.)

Originally posted by @Kyle J.:

This would have been disclosed in the CC&R’s when you originally bought the property, but I know most people don’t read those. However, this shows why it’s so important to do so if you want to rent the property or think you might ever end up wanting to.

The rental restriction does not need to be in the CCR's. It could be in the much more informal Rules & Regulations. No one ever seems to ask for copies of those when buying. They only ask for CCR's.

As for what @Luis Medina : can do now, there are options. Find out if there is a formal waiting list. How long is the average turnover. Is there some sort of hardship exemption? What is the HOA doing about the people who rented above the 20% cap? Did they rent before or after the rental restriction was put in place? If after, are they fining them? If not, then they shouldn't be allowed to fine you. Did the HOA follow proper procedures when enacting the cap? Are they willing to allow your rental if you offer compensation to them?

Originally posted by @Greg M. :
Originally posted by @Kyle J.:

This would have been disclosed in the CC&R’s when you originally bought the property, but I know most people don’t read those. However, this shows why it’s so important to do so if you want to rent the property or think you might ever end up wanting to.

The rental restriction does not need to be in the CCR's. It could be in the much more informal Rules & Regulations. No one ever seems to ask for copies of those when buying. They only ask for CCR's.

As for what @Luis Medina: can do now, there are options. Find out if there is a formal waiting list. How long is the average turnover. Is there some sort of hardship exemption? What is the HOA doing about the people who rented above the 20% cap? Did they rent before or after the rental restriction was put in place? If after, are they fining them? If not, then they shouldn't be allowed to fine you. Did the HOA follow proper procedures when enacting the cap? Are they willing to allow your rental if you offer compensation to them?

This are really good questions to put some pressure on HOA...will call tomorrow, I like the part of "if existing 4% over 20 are no been rule enforced, there should be no way to apply it to me"(as this will become discrimination).

This is the actual wording from Rules and Regulations.....

Leasing of Lots

In order to maintain the character of Medlock Corners as a primarily residential development with the Lots being primarily utilized by owner/occupants thereof, and to enhance the financing of Lots in the future, leasing of the Lots in the development are subject to the following terms and conditions:

(i) Definition. “Leasing” for purposes of this Declaration, is defined as regular occupancy of a Lot by any person other than the owner, with or

without a written lease agreement, for which the owner, any relative of the owner or any other agent of the owner receives any consideration or benefit, including, but not limited to, a fee, service, gratuity or emolument. For purposes hereof, occupancy by a roommate of an owner shall not constitute leasing.

(ii) Leasing Approval. Any Lot owner that desires to lease his or her Lot shall notify the Board of Directors of the Association thereof in writing and request its written approval (“Leasing Approval”) to lease such Lot. If the Lot owner shall receive Leasing Approval, the Lot owner may thereafter lease his or her Lot subject to the other terms and conditions of this Paragraph and this Declaration. No Lot owner shall lease his or her Lot unless and until Leasing Approval has been obtained. The Board of Directors of the Association shall issue its Leasing Approval for such Lot provided that there are not Leasing Approvals issued and outstanding for more than twenty percent (20%) of the total number of Lots in the development. Upon the granting thereof, a Leasing Approval shall remain in effect until the first to occur of any of the following: (i) the sale or other conveyance of the Lot in a bona fide, arm’s length transaction; (ii) the Lot owner has failed or been unable to lease the Lot in a bona fide, arm’s length transaction for a period of ninety (90) days from the date Leasing Approval was initially granted for such Lot, or (iii) after the initial lease thereof, the Lot at any time thereafter is not leased in a bona fide, arm’s length transaction for a period of ninety (90) consecutive days. If at the time the Lot owner seeks Leasing Approval for his or her Lot, Leasing Approvals are outstanding for more than Twenty percent (20%) of the Lots in the development, then Leasing Approval shall not be granted for such Lot at that time, except for Emergency Leasing Approvals granted pursuant to Subparagraph (iii) of this Section 16(b). Any Lot owner who is denied Leasing Approval for the foregoing reason, shall be entitled to request that such Lot owner’s name be placed on a waiting list maintained by the Board of Directors of the Association or its management agent, and such Lot owner shall thereafter become eligible for Leasing Approval, if the Lot owner continues to desire such Leasing Approval, at that point in time when the number of Leasing Approvals issued and outstanding falls below said figure of twenty percent (20%) of the total number of Lots in the development. No such Leasing Approval granted with respect to a particular Lot shall be transferable to any other Lot owner or Lot. The Board of Directors of the Association shall have the authority to impose such other and further requirements governing the issuance of Leasing Approvals as may be reasonably necessary to effectuate the provisions of this Paragraph.

(iii) Emergency Leasing Approval In addition to the foregoing leasing rights, the Board of Directors of the Association shall also have the authority to issue, in its sole discretion, emergency approvals for the lease of a Lot (an “Emergency Leasing Approval”) due to situations arising from death or catastrophic illness, job transfers or other extraordinary or emergency situations that would reasoning Approval. Each Emergency Leasing Approval shall be valid only for the period of time specified by the Board at the time such Emergency Leasing Approval is granted and the Lot owner shall immediately discontinue leasing of the Lot at the end of such time period unless a Leasing Approval or an additional Emergency Leasing Approval is first obtained. Emergency Leasing Approvals shall be automatically revoked if during the term of the approval, the owner is approved for and receives a Leasing Approval.

@Luis Medina

Just read the “fine print,” it seems that you can be put on a waiting list. Your hands are tied, but this is the way I would play it....

1) I would ask for a list of approved rentals. Get a clear understanding for their approval process.

2) I would get on the waiting list

3) ask why there are 24% rentals when the declaration clearly states that the threshold is 20%

4) if you get any pushback, or do not feel satisfied with their response, I would consult an attorney on next steps.

-Sam

@Luis Medina . If you hadn't said anything or found you a private tenant and they still received their payment they wouldn't have been any wiser. You gotta be slick with HOA. It's kinda too late but I would just sell it dude an HOA is a pita seriously you can invest in another market with that money or stay there for another 6 months and then just rent it out without saying a word.

@Luis Medina - Does your state allow contract for deed? You could sell it on a land contract or a wraparound mortgage. You might even be able to get away with a lease option if you structure it correctly. It would be a hybrid between a lease and a sale. One could make the argument that it was a sale and they technically own the property.

But I’m not sure of your goals with the home.

I'd be very cautious trying to bank on home appreciation at this point in the market cycle.  What if you sell and invest in a presumably higher cap rate opportunity elsewhere?  

Originally posted by @Nathan Williams :

I'd be very cautious trying to bank on home appreciation at this point in the market cycle.  What if you sell and invest in a presumably higher cap rate opportunity elsewhere?  

I prefer to hold a bit longer as this area is getting crazy out of control on prices. Less than 2 miles from this property, they are building townhomes similar to mine with prices starting on the mid-400K