Can I rent out my condo? Their is no condo board as of yet since the owerns have not yet sold 75% of the suite

Asked by Gary Duarn, Lowell, MA Sun Aug 12, 2007

Hello,

I just bought a condo in a new development. I may have to move because of a working situation, will I be able to rent out my suite? The condo by laws say no, but there is no board as of yet, since only 30% of the development has sold out. Apparently they can not turn it over to the property management company until it is 80% sold.

Also, if I do get to rent out my suite, will i be grandfathered in when the new by laws are created?

Thank you!

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5
Ellen Chung, , San Mateo, CA
Sun Aug 12, 2007
BEST ANSWER
I agree with Cindi. When I worked on new condo developments here in the Bay Area, they also had similar requirements--the occupancy requirement is actually due to the bank's and condo insurance guidelines, generally they required at least 70% owner occupied units with a maximum of 30% investments. The reasoning behind this is 1) Investments tend to be less cared for than homes, and 2) If in the future the development is mostly investors, future buyers' abilities to buy will be hindered since lenders do not like to lend to developments mostly occupied by investment units.

In your particular situation, the developer may give you an exception because you have already purchased your condominium, especially during these times when new developments are having difficulty selling their units. Your situation is not intentional and the developer will most likely allow you to rent out the unit, at least temporarily. It is near impossible for the entire complex to be owner occupied for all time--which is what I interpret the condo laws to say according to your post. That would mean that whenever an owner wants to upgrade to a home or a larger condo/townhouse, they would have to sell their current condo no matter what, which I find to be highly improbable rule to apply to everyone. However, the rules and regulations stated by the condominium association are still enact and enforceable whether or not it is under the developer's control or under the property management company's control. So it is essential to speak to the developer to find out what you can do to prevent any future trouble for yourself. Best of luck Gary!
Web Reference:  http://www.simpluxe.com
1 vote
Pam Winterba…, Agent, Danville, VA
Sun Aug 12, 2007
Gary....I would go back to the builder to plead your case due to your employment situation. They might be able to make an exception. Good luck.
Web Reference:  http://pamwinterbauer.com
1 vote
The Hagley G…, Agent, Pleasanton, CA
Sun Aug 12, 2007
To be safe, I would contact the bulider, explain the circumstances, and ask for permission.
Web Reference:  http://www.cindihagley.com
1 vote
Rita Thieme, , Upton, MA
Sat Sep 1, 2007
Your builder might be very happy for a chance to change the condo rules, to help himself out if the condos are slow to sell in this buyer's market.

Go talk with him. Otherwise, you actually are out of luck if your condo rules and regulations don't permit renting.
0 votes
Bruce Lynn, Agent, Coppell, TX
Thu Aug 16, 2007
I'd just ask the builder. They might even need your place to give their clients a temporary place to live while their units are completed. They might be able to use yours as a model? If the by-laws say no now, it probably doesn't matter that a board is not in place yet. Those bylaws would be the governing set now and it means the board is likely controlled by the builder. Those end up being the starting guidelines used by the HOA and subject to change if any by the new board and homeowners. I'll guess there is not a work around and a grandfather clause. That would be pretty unusal I'd think.
0 votes
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