Most individuals in community associations fall into one of three categories:
- Owner/Occupants: motivated to maintain value and foster relationships
- Investor Owners: motivated by financial benefit; less regard for the quality of the community
- Renters: Often view community associations as apartment living
In many homeowner and condominium associations, there exists a stigma against renters. Often this stigma is unwarranted. If rental issues arise in your community, ask a few preliminary questions:
1. Do tenants receive governing documents?
2. What communications (if any) do tenants receive from the association?
3. What steps are taken to involve tenants?
4. Is there a record to support the idea that tenants cause more problems in the community?
Communicating and involving renters in the community may resolve rental issues facing the association and the membership.
What Constitutes a “Rental”
Under Oregon law, “rent” means “any payment to be made to the landlord under the rental agreement, periodic or otherwise, in exchange for the right of a tenant and any permitted pet to occupy a dwelling unit to the exclusion of others and to use the premises.”
If the association has a rental restriction and there is a question of whether an owner is in violation, it may be difficult to determine if an owner is actually “renting.” For example, if the owner’s child lives in the home and is not paying any rent, then that arrangement does not likely constitute a “rental.”
But what if someone other than the owner is residing in the property and it is difficult to determine whether the arrangement is a rental? One thing an association can do is have the owner sign a rental affidavit. The affidavit is a signed and notarized document stating that the owner is not renting their unit. This satisfies the board’s obligation to inquire whether the property is in violation of any rental restriction. Click here for: Sample Rental Affidavit
Adopting a Rental Restriction
Restricting an owner’s right to rent or lease their lot or unit requires an amendment to the governing documents. There are several things to consider before embarking on a rental amendment. First, will the association get enough owners to vote “yes” to approve the amendment? Should the rental amendment be retroactive, or should existing owners currently renting be exempt? Lastly, consider adding a “hardship” clause which gives the board discretion to allow a rental which exceeds the rental cap in the case of extenuating circumstances (military service, overseas job transfer, etc.)
There are other options in addition to a blanket rental restriction. First, the association could adopt an amendment regulating leases or rentals. Requiring, for example, all rentals must be at least 30 or 60 days, all lease agreements must include a provision that the tenants will receive and follow the governing documents (including rules and regulations), and owners who rent their property must provide the association with the tenant’s contact information.
In most cases, the association is better off focusing on the fair and equitable enforcement of the association’s governing documents. If renters are causing parking issues, enforce the parking restrictions. If tenants are creating noise complaints, enforce the nuisance or noise provisions. In other words, deal with the effects of renters rather than attempting to restrict or limit rentals.