Condo owner since 1995; CC&Rs changed to prevent rentals; Can they do this since I bought under CC&Rs without restrictions on rentals?

Asked by jadavis126, Tucson, AZ Thu May 16, 2013

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11
Spirit Messi…, Agent, Tucson, AZ
Thu May 16, 2013
The official answer needs to be, speak with legal representation, like a real estate attorney.

I have seen in past couple of years many condo & townhome changing the CC&Rs and or bylaws to not allow any more rentals or only a certain %. Some may see this as protecting the value of the property and overall subdivision value, but opinions on this vary. Some owners (maybe the ones that voted) didn't want their subdivision turning into a "shanty town" of rental properties.

As a owner, I encourage you to contact the management company to see how they came about this decision. If you don't like their answer, a person is always free to seek their own legal counsel.

Spirit


Spirit Messingham, PLLC
3rd Generation Full-Time Realtor®
Tierra Antigua Realty
Direct (520) 471-6900
Fax (866) 365-5208
SpiritRealty@cox.net
http://www.TierraAntigua.com
2 votes
Robin Willis, Agent, Tucson, AZ
Thu May 16, 2013
Spirit Messingham is right. You need to speak to an attorney. Depending on how your CC&R's are written, a vote of the majority of owners may be required. I recently went through a lot with my own HOA so I'd like to recommend a great attorney who is relatively inexpensive but also gave us excellent advice.

His name is Kevin Harper at Harper Law. The phone number there is 602-256-6400.
1 vote
Howard Roth, Agent, Tucson, AZ
Thu May 16, 2013
Yes. They can do that, but it requires a majority vote by the owners, so you should have had a chance to vote on it when the change was made. They probably did this to keep the percentage of rentals down. If you have too many rentals in the complex, you can lose FNMA approval. Please note, however, that most appraisers are now reducing the appraised values if the option to rent the property out is eliminated.
1 vote
Danielle Nic…, Agent, St Louis, MO
Sat Feb 21, 2015
I would first speak with your association and see if you may be "grandfathered" in to allow you to rent. The restrictions are often important in maintaining property values as condos with high rental numbers can often have problems with qualifying for financing, etc.
0 votes
Michael Lamo…, Agent, Tucson, AZ
Sat Feb 21, 2015
Market shift requires adjustment. Sometimes they make it up as they go.
0 votes
CJ Tholberg, , Tarzana, CA
Fri May 17, 2013
Consult your CC&R's and Bylaws. They define what is necessary to amend the governing documents. Providing all criteria was met and there is no applicabe local, state or federal law that would restrict the HOA from being able to enforce the restriction, they are acting within their power.

But I also agree with the other contributors and say if this is an issue, consult your attorney.
Web Reference:  http://www.capcamerica.com
0 votes
Spirit Messi…, Agent, Tucson, AZ
Thu May 16, 2013
And the other agents are correct, usually it is a majority vote. It depends on each set of CC&Rs. Usually a certain % of the owners have to approve an amendment. That would be included in the CCRs themselves, towards the end of the CC&Rs.

Spirit
0 votes
Dave Sunderm…, Agent, Tucson, AZ
Thu May 16, 2013
They can do that. Generally with a majority vote of the home owners. It helps for FHA and VA future sales. Dave.
0 votes
Michael Shin…, Agent, Tucson, AZ
Thu May 16, 2013
I wish I was here to give you better news but chances are you do not have grandfathered rights, but I am not an attorney. As previously mentioned, I highly recommend talking with a real estate attorney who specializes in these matters. Please let me know if you would like a recommendation.
0 votes
Ric Mills, Agent, Oro Valley, AZ
Thu May 16, 2013
Unfortunately, the answer is probably yes. However, my advise is to take to a local RE attorney and have he/she look it over. They will be able to give you legal advise. The reason they want to restrict rentals is so that they can remain eligible for financing of all Condos under federal guidelines. Too many rentals and your complex is may no longer be eligible for financing under FHA or Fannie and Freddie back loans. That is a BIG deal for re-sales.
0 votes
Mack McCoy, Agent, Seattle, WA
Thu May 16, 2013
Yes, of course they can. Any amendment to the CC&Rs can changes the rights of homeowners, that's usually the whole idea.
0 votes
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