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December 17, 2006
Renters in HOAs - What Do They Need To Know?
Renters seem to be on the mind. I receive a lot of questions about renters in condos and townhouses. They are not usually indicative of a favorable relationship. So for starters, one good question is what an owner is required to give their tenant when it comes to documentation.
Homeowners who rent out their units in a condo or townhome situation need first to check the governing documents to make sure they are entitled to do so. Some documents limit the ability to lease.
If an owner is entitled to lease their unit, at the very least the the renter should get a copy of the Association handbook or ground rules. The renter should be instructed to read them. Some documents require owners who lease their units to get a statement from the tenants that they have read certain documents including the rules, and sometimes even the CC&R's and Bylaws. CC&Rs are generally difficult to read and Bylaws are generally geared to operations of the Association (and generally, of little interest to the tenants) so it will probably be of even more value for an owner to sit down with the tenant(s) and go over the basic "rules of the road."
Another thing that owners who want to rent should do is include in their leases a clause that a violation of the governing documents is cause to terminate a lease, at the discretion of the owner renting the unit. This is because an owner can be caught in the middle if they place a tenant who tends to break the rules or cause problems, and there is no cause in the lease to terminate it. Owners are responsible for the conduct of tenants, including nuisance activities and other violations of the rules, damage to property, and the like.
Being a landlord owner does not absolve the owner of all responsibility in the Association. To the contrary, it adds more responsibility to the mix because the owner is responsible for the conduct of another.
So make sure as a landlord owner to carefully screen tenants, check references, do credit checks, use written agreements that provide an out when a "problem tenant" is discovered, and make sure the tenants understand all rules that could possibly be violated, to the extent you can figure that out from the documents.
The reader who sent me the above question also asked:
"What site would you recommend for rental contracts (free possibly) that may pertain to garage rentals?"
There are lots of sites with form contracts to lease, and a search for those terms would open a lot of doors. For those shy of buying on the internet, some stationary stores and office stores sell packets of forms - leases and other form contracts.
However, the one thing you probably will not find is the above advice about including a clause in the lease that allows an owner to terminate a lease if the tenant violates the rules or governing documents. The catch is that the lease should not terminate based on something the owner did not understand was an obligation, so make the wording and the "tenant education" clear if you want to avoid unexpected legal issues.
Posted by Beth Grimm at December 17, 2006 8:29 PM