October 1, 2016
The Board was recently contacted by a Landlord Owner about the rules related to Rental Tenant turnovers. As a result of the questions raised by the inquiry, on the Waiting List process when rental Tenants move out of the Community, while there are other Owners on the Waiting List wishing to rent their Units. The Board then realized that the ten-word summary on page one of the prior three-page summary of the Landlord Owner Rental Rules, was not consistent with the actual full text of 3.13.7: Effect of Rental Ceiling. It was unclear, because it implied only “vacated units” could be placed on the Rental Waiting List, when in fact, the purpose of the Rental Waiting List was intended to allow all Owners to have the right to be placed on the rental waiting list for the purpose of claiming their right, in the future, to rent their Unit.
The Board submitted the following issues for review by our Association’s Attorney:
Paragraphs 3.13.7, 3.13.8, 3.13.10 and especially 3.13.11 seem to state clearly that Landlords are not entitled to routinely re-rent their property if there are other Owners on the 'Waiting List'.
Specifically 3.13.11 reads "if a Rental Waiting List exists, no Lease or Lease renewal shall be approved for a Rental Unit until all Owners who are on the Rental Waiting List have been given the opportunity to apply for Lease Approval."
The Association’s legal counsel reviewed the relevant language of the 2006 amendments, and provided the following response to the Board:
“I have reviewed the relevant portions of the Declaration and determined that the Rental Waiting List does provide for turnover each time a Tenant moves out of a Rental Unit if there are other Owners on the Rental Waiting List who wish to rent their Units. The Sections you cite in your email are all relevant to this analysis.
It is worth noting that if an Owner who is currently renting anticipates that a Tenant will be moving out, they can add their name to the Waiting List 60 days prior to termination of that Lease. In addition, the Owner at the top of the Waiting List has only 60 days from the date of notification to submit a request for Lease Approval. If they do not, their name goes to the bottom of the Waiting List and the next person on the List is offered the opportunity.”
Owners are directed to the 2006 Amended CC&Rs for the entire text of the 2006 Rental Amendments, as failure to timely comply with each rule may impact their ability to remain in the Rental Pool, or result in individual monthly fines to the Unit Owner for each rule violation, until compliance with the rule is remedied.
The Board of Directors is always available to respond to questions or concerns related to the following stated intent in the Owner approved 2006 Amendments: “It is the intent of the Owners that the Units shall hereafter be acquired for occupancy by their Owners and occupied consistent therewith.”
SYNOPSIS** OF SOME OF THE COMPLIANCE RELATED RULES
**Please refer to your copy of the Governing Documents for the full text.
3.13.1. Rental Defined and Regulated. The restrictions on rentals do not apply to Owners who occupy the home, and they may rent rooms subject to the Governing Documents and Auburn City Codes.
3.13.2. Minimum Lease Term Required. No person shall be permitted to Rent or Lease less than the entire Unit and all leases to be for at least 6 months. This prohibits a Tenant from renting rooms to people not declared on the Owner’s Lease, approved by the Association prior to occupancy.
3.13.3. Minimum Ownership Period Required Before Rental. New Owners must occupy the Unit for one year to qualify for the Rental Pool, subject to the controlling Governing Documents.
3.13.4. Lease Requirements. This section requires the original signed Lease to bear the written approval by the Association granted prior to the occupancy of the Tenant, or for a renewal of the lease, both to contain language acknowledging the Association’s rights, and the Tenant’s obligation under the Governing Documents.
3.13.5. Lease Approval. This section requires prior to the Rental of a Unit to a Tenant, and prior to the renewal of any previously approved Lease, Unit Owner shall submit a valid and binding new or renewal lease, executed by both the Owner and proposed Tenant to the Association, and contingent only on the approval of the Association for approval. Association will within seven (7) days of receipt of such request, grant its consent to the Owner if listed subsections 22.214.171.124 through 126.96.36.199.4(found on page 5 of the Amendments) permit such approval.
3.13.6. Rental Ceiling Set. Except as provided in 3.13.12, the maximum number of non-Owner occupied Units in the Condominium at any one time shall not exceed Nine (9) (referred to in the Declaration as the “Rental Ceiling”) NOTE: Exception for ‘related party’ Unit rentals is addressed in 3.13.1.
3.13.8. Pre-existing Leases. This section requires renewal of Leases to be submitted for Lease Approval pursuant to §3.13.5 and §3.13.9’s restriction of up to 60 days before the expiration of the Lease term then in effect. Also, the assignment or subletting of a Unit by a Tenant or the sale of a Unit by its Owner shall terminate the right to renew a Pre-existing Lease under this section.
3.13.10. Notice of Rental Termination. Owners must advise the Association of the termination or non-renewal of their Lease, and any such termination or non-renewal will result in the end of their opportunity to rent their unit if there is a Rental Waiting List.
3.13.11. Rental Waiting List. (Subject to listed exceptions): If a Rental Waiting List exists, no Lease or Lease renewal shall be approved for a Rental Unit until all Owners who are on the Rental Waiting List have been given the opportunity to apply for Lease Approval.
3.13.14. Governing Documents to be provided to Tenants. If Unit Owner fails to provide proof, Association may provide to tenant, at a per page copying cost, as a special assessment against the Unit Owner.
3.15.2 Tenant Screening. The Unit Owners are required to conduct a tenant screening process, to the extent possible, reasonably in compliance with 3.15.3 for all tenants except Related Parties, or alternately use an independent Tenant Screen Service. If the Owners do not do the tenant screening, a fine to the owners, after notice and opportunity to be heard is permitted. The Owner shall transmit a summary of their screening process, without confidential information included, or the outside screening service’s approval notification of the Tenant, to the Association’s Property Manager along with a copy of the Lease, for retention in the Unit’s File.
3.16.2. Registration of New Occupants. All Owners must register new Occupants with the Board at the time they move in or within forty-eight (48) hours of meeting the definition specified in 1.1.4. Nothing in this Section shall preclude an Occupant from submitting the registration required by this Paragraph.