Tuesday, December 31, 2013

Rental Restrictions


A popular topic among association dwellers is the right of an association to restrict rental of property.  This is one of the areas where it is important to distinguish between a COA (condo association) and a HOA (single family homes).  Each association is governed by different laws.  Fla. Stat. Chapter 718 governs COAs and Fla. Stat. Chapter 720 governs HOAs.

Condo rental restrictions are common and receive the most attention.  A few years back a judicial ruling supported condo rental restrictions which were created by a membership vote, noting when a person buys a condo they are on notice the rules and restrictions of the COA can be amended.  In response to the ruling, the Florida Legislature enacted Fla. Stat. §718.110(13), which states any amendment to restrict rentals is only effective against those owners who voted for the amended and those purchasing property after the amendment is recorded.

HOAs have traditionally been treated differently than COAs when it comes to rental restrictions.  The reason being COAs have members living in very close proximity to each other whereas a majority of HOAs have stand alone housing (the exception being townhomes, which are more like condos, but formed as HOAs).

The court cases involving HOAs have for the most part ruled the right to sell, lease or otherwise transfer property is a vested right which cannot be taken away without consent of the owner.  A vested right is any right which would be a deal-breaker for the reasonable buyer if the rule prohibiting it were in existence at the time of purchase.  In other words, if the restriction existed when you were considering your purchase you would have not purchased the property.  

The issue members of HOAs have in asserting this right is the rulings are at the appellate level and if an owner does not know to argue this at the trial level and cite the appellate rulings, the judges will consider the condo rulings because the HOA lawyers will use those to promote their position the HOA can create rental restrictions.

The lack of a significant amount of case law governing HOAs means judges and lawyers turn to the condo cases for guidance.  In a majority of the issues, the law is the same, but there are still differences between the two.  This is why it is important to have a lawyer for these types of cases and one that is experienced in HOA and condo law.  Not only are there nuances in the law, but both types of associations have special procedures for litigating.

5 comments:

  1. Our association is governed by Florida statute 719. A vote is coming up at our annual meeting about restricting renters to two years and then they must purchase or move out. No one has consulted a lawyer about this, is this kind of vote even legal? If it does pass, can we go to 719.304 and use this to protect current owners?

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  2. Very effective step for house owner! Thanks for this great job
    Punna Chiang Mai

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  3. Thanks for the post. Surviving as a tenant may trouble you sometimes. Sometimes the landlord behaves badly and sometimes the property manager itself. In some other cases, landlords are having headache due to tenants. Luckily certain laws are there now to have control on such situations. Well done by making this info public, everyone can be aware of their rights. For rental houses or any tips or property management, make a visit at Real Estate Management Greensboro, NC. You'll surely love the service.

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  4. Question_have a condo in Florida. There is a 1996 amendment to the doc which limits rentals. I purchased my unit after that date. The board is now wishing as part of overall document update to apply more rental restrictions. They are modifying the documents and include some of language from 1996 amendment but not all and then much farther. If these change are approved I plan to declare my non-consent under 718.110(13). There is no language in doc revisions to cover handling of previous amendments. At that point would the 1996 amendment still be enforceable or is it now invalid? Tough question but need advice. Thanks

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