Condominium Associations

Is your association protected from investor slum landlords?

We are seeing it more and more that when local homes and condominium units are put on the market for sale, rather than being purchased by retirees or families, many are being snapped up by shrewd investors and then being turned into yearly rentals or rented on internet short-term bed and breakfast sites.

We then get the complaint calls from neighbors, who see many of the short-term daily or weekly renters treating the homes or units like resort hotels with late night loud parties and people coming and going at all hours. Others are being rented on a yearly basis leased to whomever will pay the rent: many of whom are fly-by-night unsavory folks. Until they decide to flip the units one day, the out of sight, out of mind, investor purchasers do not really care what their tenants are doing to the neighborhood as long as they keep getting their rent.

Without any protection in your association’s governing documents, there is really no way to prevent or stop this practice in your community and it seems to be getting worse every month. However, there are ways to amend your documents with a membership vote to curb these rental problems being created by the investors.

One effective method is to amend your documents to say that new purchasers cannot rent their unit until they have owned it for say three years. Another is to limit short-term rentals to no less than 30 days and have an effective screening processing in place for background approval of renters. You might want to also limit the length or rentals to say no more than six months to stop yearly rentals.

It is also important when restricting rentals to also have reasonable restrictions on guest of owners in their absence to stop the abuse of owners and renters claiming that they are “guests” rather than tenants. You could say that guests in the absence of the owner can only stay for so many days and only so many times per year.

Last, to keep bad folks from moving into your community, it is important to require new residents, who may be friends or family members of approved owners, to be background checked for approval once say they have lived in the home or unit for over 30 days.

Convicted felons, financially irresponsible people and others, whose bad character have been found by the law to not have the right to live in a community that have specific written regulations to exclude them. They can be kept out of your community if you have the proper transfer approval screening provisions in you documents.

Of course under Federal Fair Housing Laws, you cannot discriminate based upon race, religion, sex etc. in approving or disapproving potential new owners and tenants. However, you can discriminate against bad folks and they don’t have to right to live in your community if you have document language preventing them and you follow background processing procedures to properly disapprove them before they have a chance to move in.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.