A: Rental units have become a consistent problem to the quality of life in our large HOA community. Our board members and property manager refuse to reveal how many units are rentals. Some of these problem renters brought into the HOA by negligent landlords linger around for years before they are evicted. — E.G., Santa Clarita
A: Before renting out their home, per Civil Code Section 4740(c), HOA landlords must provide the HOA with their prospective tenant’s name and contact information. If the HOA enforces this requirement, it should know how many rentals are in your HOA. This is important for purposes of qualifying for FHA/FNMA mortgages, among other things.
If tenants are creating problems, the HOA cannot discipline them directly because they are not owners. However, the HOA can and should hold their landlords responsible for violations by their tenants. As to the number of rentals, that is not a required HOA disclosure to members, but a well-managed HOA should have that information. Given the impact of excessive rentals upon a community, why would a well-run HOA be reluctant to disclose that information?
Q: Our CCR’s and rules prohibit short term rentals (“STRs”) of less than 30 days. Shortly after one owner purchased the unit, people started showing up for short stays and when asked, admitted they were STR “guests”. We have photographic evidence she is running a STR, but despite the evidence, the owner denied running a STRO and told us only “family members” stay there.
Her fines now exceed $15,000.00. She never shows up to any violation hearings. Our HOA attorney sent two cease and desist letters, but the violations continue and her “guests” continue to violate various rules. After thousands on attorney fees we still can’t get compliance. What avenues are left open to us to collect the outstanding fines? Can she be forced to live by the CCRs and rules? It’s beyond frustrating! — M.R., San Diego
A: The recent amendment to Civil Code 5850(c)(2) caps fines on non-safety violations at $100. That means that owners may consider the fine as a cost of doing business, since the amount is probably similar to the commission they pay the rental website host. This now means the only way to stop such scofflaw landlords is to file a lawsuit and seek injunction and attorney fees. In the past, I advised clients to impose larger fines as a deterrent, but that is now not allowed – leaving lawsuits as the only option for HOAs. (Is that what the legislators intended, to encourage lawsuits?)
Q: My HOA recently passed a $1000 a month assessment to each owner of a condominium which has been rented out, with a vague explanation that it is to cover expenses to the homeowners. What is your take on that charge? — M.M., Santa Monica.
A: Civil Code Section 5600(b) bars HOAs from imposing an assessment except to defray actual HOA costs. Unless the HOA can generally prove that it costs an extra $1,000 per month to have a renter in place, that fee may not withstand legal challenge, under Watts v. Oak Shores, a 2015 appellate case. I hope your HOA can find other ways to handle its rental problems.
Richardson, Esq. is a fellow of the College of Community Association Lawyers and partner of Richardson Ober LLP, a California law firm known for community association advice. Submit column questions to kelly@roattorneys.com.
