I'm a REALTOR and I have a client who has hired me to rent out his home, as he is looking to move closer to work and cannot sell this property without a big loss. A by-law was changed in 2001 that grandfathers rental units, but anyone after has to apply and the Association can deny the app, plus are limiting the amount of homes rented to 5 or less. The association must also approve the tenant, and the lease before allowing the home to be rented. As far as I know, There are at least 4 leased out and one on the market by owner beside my clients. I've only seen this in Codo associations or Coops and was wondering if they had the right to deny my client to be able to move closer to his work?
State/Country relating to question: Georgia
reading the by-laws which seem conflicting and prejudice to owners after Sept. 24, 2001.
Hello and thank you for the opportunity to assist you. There may be a slight delay between your follow ups and my replies as I am typing out my answer. Please remember that this is general information only, not legal advice, and no attorney-client relationship is formed.I am sorry for your situation. Essentially the question is - does the HOA have the right to form a bylaw that mandates that a tenant is pre-approved and otherwise inhibit rental of the unit by the owner?Unfortunately, this is lawful - HOAs have the right to have bylaws that allow the HOA to pre-approve a tenant. This is touched base on in Bailey v. STONECREST CONDOMINIUM ASS'N, 696 SE 2d 462 - Ga: Court of Appeals 2010 (although not discussed).So prima facie, it is lawful. However, there is a trend in Courts to disallow any rules that prohibit and discourage business. So he may be able to get this reversed in Court. But he'd have to file and challenge this bylaw, which obviously he may not have time and financial/emotional investment to do so.While the legal system tries to be inclusive of every possibility, sometimes people have limited avenues to seek relief. Please understand that this is not the expert’s fault. Surely, you prefer that I tell you the truth rather than what you wish to hear. Please keep this in mind when rating my answer. I understand that this may not be easy to hear, and I empathize.I hope this finds you well. Please click Reply to Expert to keep talking, or rate my answer when we are finished. Kindly rate my answer as one of the top three faces because this is how I get credit for my time with you. Otherwise, reply to chat more until we are finished and you are ready to rate. I work very hard to formulate an informative answer for you; please reciprocate my good faith. (You may always ask follow ups free after rating.)
Qualified attorney in private practice including business, family, criminal, and real estate issues.
Thank you for your response, as I would much prefer honesty then here what would sound best but find not correct. The terminology in the bylaw states that the Board can approve a lease due to "undue hardship". I am only familiar with that term when it comes to Employment Law however I feel that it is bit subjective and that between my client's relocation and house being underwater the term would fit their usage. I just wanted to see if you had any other definition of the term with regards XXXXX XXXXX estate law. Thank you.
My pleasure, friend.This is a good question. What does undue hardship mean? Because the HOA wrote the bylaw, they are responsible for ultimately defining it. However, to get a Court opiniion, in Spratt v. Henderson Mill Condo. Ass'n, 481 SE 2d 879 - Ga: Court of Appeals 1997, the Court addressed the verbiage:"...leasing of a unit or units shall be prohibited, except in the case of undue hardship..."The Board denied the petitioner undue hardship, and it went to court. The Court states that "declaration delegates decision-making authority to a group and that group acts, the only judicial issues are whether the exercise of that authority was procedurally fair and reasonable, and whether the substantive decision was made in good faith, and is reasonable and not arbitrary and capricious. [Cits.]" Saunders v. Thorn Woode Partnership, L.P., 265 Ga. 703, 704(2), 462 S.E.2d 135 (1995)..In other words, the Court states that the HOA makes the decision as to what it means, and it is up to the Court to decide if this interpretation is made in good faith.The Court further reinforces the HOA's right to make this bylaw by stating: "As allowed by OCGA § 44-3-76, the Declaration's leasing provision specifically authorizes the Board "to make and enforce reasonable rules and regulations and to fine, in accordance with the Declaration and By-Laws, in order to enforce the [leasing restrictions]."Ergo, it is up to the HOA to determine what it means by "undue hardship." If there is no explanation and the HOA Board gives an unfair definition or one that is in bad faith, then your client can take it to Court. However, if HOA has a solid definition and applies your client's case to it and it does not pass muster, then the Court is likely to uphold the decision.I know, it is not fair, but again, the legal system is not always 100% fair in every case, I am afraid.I hope this finds you well. Please click Reply to Expert to keep talking, or rate my answer when we are finished. Kindly rate my answer as one of the top three faces because this is how I get credit for my time with you. Otherwise, reply to chat more until we are finished and you are ready to rate. I work very hard to formulate an informative answer for you; please reciprocate my good faith. (You may always ask follow ups free after rating.)
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