Tenant HOA Violations

3 min read · Written By: May Galan, Senior Vice President, Association Management

HOA Violations, not my favorite subject and definitely a huge headache for investors, landlords and association managers. Of course, a necessary evil to maintain a standard of living in a community.

BUT WHAT ARE THEY REALLY?

Homeowners’ associations (HOA) have a set of governing docs, which typically include CC&Rs, Bylaws, Articles of Incorporation, and rules and regulations. Failure to abide by these rules and regulations constitutes a violation.

But for rental properties in HOAs, these violations and, sometimes, fines are assessed to the owner of the property not the tenant. Left unresolved these violations can result in large fees and issues with the HOA. Resolving these issues with HOAs can be time consuming, frustrating and costly and to add, each state has their own statues on how these fines can be assessed and how liens can be placed on properties. This not only cumbersome for investors but depletes ROI for their portfolios. Very few companies can provide investors with HOA violation services that help mitigate the risk of liens and financial exposure, and  Precedent Management, LLC has proven to be the top choice for HOA violation management nationwide.  Even if the investors handle their own property management, often times, the staff does not have the resources, relationships, knowledge, or negotiation tactics to protect them from costly fines. Mail management from HOAs can even hinder the process if notices of violations are left unanswered. Investors must have a plan in place to protect their assets and ROI.

MOST COMMON HOA VIOLATIONS

·      Overgrown landscaping (typically owners’ responsibility)

·      Improperly parked vehicles (tenant responsibility)

·      Trash containers left outside (tenant responsibility)

·      Pet violations (tenant responsibility)

·      Noise or nuisances (tenant responsibility)    

·      Unapproved architectural changes or even decorations (tenant responsibility)

Ultimately, the owner of the unit is responsible for abiding by the rules and regulations of an HOA. While landscaping may be the responsibility of the owner as per the lease, removing the trash containers, for example, is a tenant responsibility. The question becomes “why should the fine be imposed on to the owner?” The answer is in the CC&Rs. The responsibility is of the members or owners of the property in an association.  Unless the CC&Rs can be amended for those associations that are fully owned by investors or build to rent communities, the tenants cannot be fined directly. The rules and regulations of the HOA must be fully disclosed in leases in order to comply with state tenant laws.

WHAT SHOULD INVESTORS DO IF THEY ARE RENTING OUT PROPERTY UNDER THE AUTHORITY OF A HOMEOWNER’S ASSOCIATION?

1. Landlords should have a clause in their lease where the tenant agrees to follow the CC&Rs and abide by the HOA Rules and Regulations.

2. There should also be a clause where the tenant agrees to reimburse the landlord for any fines assessed due to the actions of the tenant or their guests.

3. Landlords should provide tenants copies of the HOA Rules and Regulations to help set clear expectations.

4. Landlords should make sure the tenant has renter’s insurance. Damage to neighboring properties can be expensive, especially if there are associated legal bills.

5. Use a professional management company, especially one well versed in leasing and managing homes with HOAs.

6. Use professional services to track, manage and resolve HOA violations.

Investors can contact Precedent Management for Association and SFR Management proposals. Precedent has saved our clients millions in fees and fines over the past 5 years (one client alone saved over $3 million in one year!) and can help save hundreds of thousands of dollars more a year by finding affordable solutions for Build to Rent Communities and SFR portfolios.