My partner is encountering some issues with the HOA at a property he inherited in 2012.
The property declaration sets a rental cap of 20% with rental privileges granted by the board for board-specified durations. There are call-outs for specific hardship exceptions like inheritance and employment relocation, but approval for these exceptions are also at the discretion of the board.
At the time my partner inherited the property, we were mislead by the then HOA Board President into thinking that given the manner in which he came to ownership and the fact that we live out of state, he would be granted the ability to hold the property as a rental into the future. We subsequently refinanced the property to take advantage of more favorable interest rates and secured a friendly first tenant (a family member actually) to rent the unit as an initial placeholder. This was intended to provide breathing room to take our time disposing of the estate. Our plan was to move a new tenant in after working through the personal property of the estate.
Now that we are ready for the next stage (moving in a new tenant), the current board has taken the position that they will not honor the information provided by the previous board president and will instead defer to the declaration. They now consider that my partner has no cause for a hardship exception and, with the rental cap met, they are not entertaining requests to rent - the rental wait list is about 1 year.
We are preparing an appeal to the members of the board since according to the declaration, the decision ultimately rest with them, but we are not optimistic about the prospects of them deciding this in our favor. In lieu of a positive decision on their part, I have seen some talk in the forums of "renting" via an installment sale contract. Can anyone advise on this or any other strategies to hold on to this property as a productive investment?
I'd like to add that we are really only looking for positive solutions to hold on to the property as an investment. We are aware of the cost of carrying it un-rented and we appreciate the investor view of unloading unproductive properties. If this is a problem that can't be solved in the near-term, so be it, but we intend to hold on to the property even if it means getting on the rental wait list - but I hope that won't discourage creative suggestions.
Thanks in advance for the advice.
You might want to take a look at this link.
The author is Atlanta based, so you might reach out to him.
Another source might be John Federo (BP contributor). He has a personal property trust protocol for mobiles that is supposed to work in all 50 states. It might also have an application for a land trust format that might be useful.
What ever you do, run it by a lawyer. I used to live in Georgia and the HOAs seem to have more teeth under Georgia law than they do in some other states.
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!