Reader Questions - Leave My Tenant Alone

Hello Mr. Richardson,

I recently received a letter from our management company, that all owners that rent their units out must submit a copy of the agreement to the management company. The letter also says each time a renter moves out and a new renter moves in the owner of that unit will be charged a $100.00 fee. Are they entitled to a copy of my rental agreement? What is the basis they can charge a fee for a renter moving out and a new tenant moving in when there is no expense created to the association?

Thank you,

L.L., San Diego

Dear L.L.,

Tenants can often be a controversial issue within homeowner associations. FannieMae and FHA guidelines have for a number of years imposed a maximum limit on rentals allowed in condominium projects for such loan eligibility. For years the limit was 50%, but the rule was liberalized last year, and now some associations may be able to obtain waivers which may permit a larger percentage of renters. Renters are not members, and boards normally do not have the power to directly discipline them for violating association rules. Furthermore, renters are normally thought to pay less attention to the upkeep of the project, since they do not have a vested financial interest.

Associations increasingly began in the past twenty years to impose rental limits to help reduce these tenancy concerns. In response, the California Association of Realtors successfully sponsored legislation now known as Civil Code 4740. That section requires rental limits be applied only to owners which acquired their residence after the rental limit was put in place. Section 4740 also requires that prior to renting a residence, the owner must inform the HOA in writing of the date owner acquired the property, and also provide the tenant’s name and contact information.

Some associations adopt rules or even CC&R provisions requiring landlords provide additional information to the HOA. Unless your association has a written rule or CC&R requirement that the lease be filed with the HOA, you are not required to do so.

Some associations impose fees for moving to or from the property. Typically, these condominium projects, concerned about wear and tear on elevators, hallways and lobbies from moving furniture and belongings in or out of the unit. The fee charged must be at least roughly connected to an actual HOA expense, under the holding in Watts v. Oak Shores. That dispute involved an association at Lake Nacimiento which had imposed a fee on short-term rentals, based on rough approximations of costs normally incurred during the tenant moving process, assisted by the HOA’s accountant. In its 2015 published decision, the appellate court approved the board’s actions under the business judgment rule. Therefore, associations which can demonstrate actual costs incurred in the moving process can impose a fee against the owner to help defray that cost to the association. The calculation need not be exact, but must involve actual association expenses and at least rough estimates of the cost.

So, your HOA may be able to support that $100 fee, if it can demonstrate it was not just pulled out of thin air, but was the result of a reasonable study and estimate of the cost to the association of each move.

Thanks for your question,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.