In most communities, the restrictions on an owner’s ability to rent out his or her property are found in the Declaration of Condominium, Declaration of Covenants and Restrictions in an HOA and, in a cooperative community, in the Bylaws. Thus, the decision to tighten or loosen those restrictions rests with the association members and not the board alone and must be accomplished via an amendment.
Some years back, Section 718.110(13) of the Condominium Act was amended to make it much more difficult to pass amendments affecting rental rights. A Maine resident had purchased a condominium unit in a Florida community that had no leasing restrictions only to find he was on the losing end of vote to implement such restrictions after his purchase. This gentleman happened to know then Senate President Jim King and the rest is history. As with most legislation, however, there were unintended consequences. At the time 718.110(13) was amended, the real estate market was booming and most people couldn’t imagine that some time down the road there would be a need or desire to loosen those same restrictions. The only concern was how to stop communities from imposing rental restrictions when none previously existed. Fast forward several years and that same language in 718.110(13), which reads that any attempt to alter the duration of the rental term or which specifies or limits the number of times an owner can rent during a specified period, only applies to current owners who approve or to new owners who take title after such amendment is recorded and it just became harder to loosen up rental restrictions.
For example, if your community’s documents currently provide that an owner can only rent for a minimum 12 month lease term and no more than once per year and your members would like to amend that to provide for smaller lease terms of three or six months and allow leasing 2 or 3 times a year, you are altering the duration of the rental term as well as specifying the number of times an owner can rent throughout the year and the requirements of 718.110(13) will kick in.
Just as the good times weren’t always going to last, neither will the bad ones. Communities could go back and forth like pendulums on tightening and loosening their rental restrictions. At the end of the day, it is a community decision whether or not leasing should be encouraged, discouraged or simply tolerated. Arguments against leasing include the fact that too many rentals render the community unattractive to certain types of financing which drives down sales and results in more foreclosures. Arguments for leasing include the fact that paying tenants allow an owner to meet his or her financial obligations to the association. This is more true than ever since associations can now collect monies directly from tenants in delinquent units.
Wherever you stand in this debate, it is interesting to note that the very legislative change that was made to discourage leasing restrictions might actually work to make it difficult for associations that have long-standing rental restrictions from loosening those same restrictions.
This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.