Real Estate Law
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My name is***** have over 16 years experience in the law. Should you like to chat on the phone I am happy to for a nominal cost. Let me know at any time during our question and answer session if you are interested I am happy to give you more details.
I am sorry for this dilemma. However, I'm not sure I understand your specific question; are you asking if the board can prevent you from renting your property?
This depends entirely on the bylaws. Do you have a copy of the bylaws handy?
Thank you Harold. But now I am not sure I understand the question...are you asking the process to change the bylaws. If not what is your specific question?
Sir, I offered the phone call since some folks appreciate the ability to share info in that way. There is no obligation you accept that.As for your questions, the original questions (the 3 you reference) deal with the bylaws...but in your latest submission you are asking about the ability to change the rules...I was simply trying to narrow down what, exactly, you are looking for...
I will opt out...perhaps someone else can assist you. I wish you the best of luck
This is actually a more common problem than most realize. Fanne Mae and Freddie Mac have guidelines with respect to lending in condo developments. The concern is that a high percentage of non-owner occupied units can lead to sudden devaluation when the market turns. It also can mean that the development will not be kept up as well as it would otherwise. Your question as I understand it is, how does the lender determine the number of "non-owner" units. Which of course leads to the question of "what is a non-owner unit". The answer is actually fairly simple. When a mortgage is taken out, the deed of trust gets recorded. A "non-owner" unit typically has a rider attached to the Deed of Trust, which states that it is a "non-owner" unit. Therefore, the number of non-owner properties is a matter of public record. Typically, a "condo certificate" is requested by the new lender, which reflects certain data, among which is the number of recorded non-owner riders. This system is not perfect as you can imagine. Many people acquire a condo, and then later rent it out. In that circumstance, the public records would incorrectly reflect the unit as owner-occupied, when in fact it is not. The issue your association is now dealing with is they are on the bubble with respect to the number of units that are non-owner. Once this line is crossed, other owners will have difficulty getting loans, which will drastically affect the ability to sell the units, thereby lowering the values of all units. Hopefully this answers your question. I am happy to follow up with you though if I missed anything.
Great question. The distinction between primary residence / second home / investment property, are not always clear cut. Each lender can define these terms as they see fit, but here are the generally accepted distinctions as reflected on most deeds of trusts and their riders. A primary residence cannot be rented and is used by the owner as their primary place of abode. This one is fairly straightforward. A second home is one that a person only lives in during part of the year. HOWEVER, during the parts of the year that it is not in use, the property must be exclusively available to the owner. This generally precludes renting the property out for any length of time. So, if the condo association has owners who rent out their condo for 1/2 the year, or 3 months, etc., those properties would likely properly be deemed investment properties.
Freddie Mac has established guidelines (which also mirror Fannie Mae). These guidelines provide that a condo association must not have more than 50% investment units in order to be eligible for financing through them. So, in your situation, if there are more than 50% of the units who rent out their unit, even if only for part of the year, the association would likely not be eligible for Freddie Mac or Fannie Mae. As mentioned, this can be ascertained by the publicly recorded deeds, or, in some cases, the board of directors may provide the data associated with a condo certificate. I suspect this is why they are concerned in your situation. As to their ability to restrict you from renting your unit, this would have to be addressed in the CCRs. I think it would be inappropriate for them to unilaterally tell you that you are not able to rent your unit because of the percentage of investors.