What is the name of your state (only U.S. law)? Oregon
Can I rent my current townhouse or not? Here is the background information:
I am currently under the process of purchasing a new house, and am now considering rent my townhouse in Anna Ct. out. I called HOA tonight, and was shocked to hear that she said we had to be put to a waiting list for renting the townhouse out. She said this was to ensure that our owner/rent ratio is kept to an adequate level such that the potential home buyer would not be required to put 20% down payment when they buy one of our unit.
When we purchased our unit three years ago, below was what we learnt from the HOA officer (an email discussion between previous president and current HOA board member) :
________________________________________________________________________
From: ***
Sent: Saturday, November 14, 2009 5:00 PM
To: ***
Subject: Urgent. Information on proposed changes to Gov Docs
***************** previous president :
Dear Neighbors,
This Sunday from 1 - 3 is a gathering at **** house to discuss proposed changes to the governing documents. The new board made numerous changes to these documents after they were approved by the Association's legal counsel. The changes of most concern to me are:
In the Declaration: Leasing Restrictions; below is my correspondence with the Board and the Association's legal counsel's information on the matter.
Had the Board not changed the Amended and Restated Declaration as sent to them and made the comment regarding the lower % of rental homes, I would not have thought to investigate exactly what rental restrictions/requirements are currently in place by lenders, Fanny Mae, Freddy Mac, etc..
Here is what I learned:
Our Association is not a condominium, organized under the Condominium Act, but rather, is a Planned Unit Development, a Class 1 Planned Community subject to ORS 94.550 - 94.783. Gabriel Woods is a single family attached home community, each property includes the land. As such there are no rental/leasing restrictions placed on our community by any lender or entity who purchase loans in the secondary market.
Learning this made sense to me as the attorneys had said that this provision in our documents is unenforceable in law. This also explains why there is no provision in the statutes, ORS 94.55 which govern communities such as ours, regarding leasing restrictions. Also, an Owner who wants to lease their home, need not have permission from the Association and it doesn't matter how many homes are leased or the rental period. Additionally, no lender can refuse a loan, a loan modification or refinance on a home in our community based on the number of homes that are leased.
There are some owners who have concerns about getting financing based on comments made by friends, associates. Having learned that restrictions only apply to condominiums I am thinking that they were referring to a condominium sale/purchase not a Townhome/Single Family Home.
Our legal counsel, ****, at **** wrote this:
You are correct that Fannie Mae, Freddie Mac, HUD/FHA, etc. have certain project eligibility requirements and underwriting guidelines for condominiums (including requirements with respect to a certain number of units being owner-occupied). These project eligibility requirements and underwriting guidelines only apply to condominiums and not subdivisions or planned communities. There are some issues with respect to whether such rental restrictions are enforceable.
Considering all of the above then, I believe it is in order to have a conversation about removing Sections 2.7.1 - 2.7.5 Of Use of Property, leaving in sections, 2.7.6 - 2.7.9 and adding the stipulation that a Townhome may not be rented for transient/motel purposes.
*************Current board member:
A few comments in regards to this issue:
The reduction in the ratio of homeowners/renters was an issue that has been brought up more than once to our board during the last 2 years, I brought it up several times in emails and it was discussed in both the small homeowner meetings that were held at my home for those of us who wanted to openly discuss the new documents that were presented to us as homeowners by the former board. We provided that feedback via survey monkey for the former board to consider. It's unfortunate that we have incurred additional legal costs to discuss something that should have been known and corrected before it was presented for us to approve.
I spoke to **** with NW Mortgage Group today, 11/16/09, and he confirmed that according to his underwriters if the deed to our townhomes include the land then, as it stands today, our homes are considered attached single family homes and owner/renter ratios do not come into play during the financing of our homes. His underwriters are located in the same office and he can be reached at***.
With that being said I still think as a community it would behoove us to maintain a higher owner to renter ratio to maintain the integrity and "value" of our homes and community. Owners have a vested interest in keeping and maintaining their community.
********me:
After that, I, as a home owner, have not received any information regarding change of HOA policy about renting. This is truly a bad season to sell our townhouse, because the market is just about to rise, and we expect this property will be gaining value in the years to follow. If we are forced to sell our townhouse due to the HOA policy, we will be losing huge amount of money by putting the townhouse to market in the bad time. This is not me alone. HOA board member mentioned that some others are also on the “waiting list”. I want to check with you and make sure that we still have the right to rent our townhouse out. I believe HOA is to protect the rights of all homeowners, and is to bring benefits to all as a community. It will be extremely important for owners to learn what is the current lawful policy, and when that became effective if any changes have had been made.
What is the latest law in my case? If the law is still the same, can HOA document over write the law? Or, HOA document is unenforceable in law. HOA can not force us not to rent out our townhouse? I will extremely appreciate if you could give a reply (and possibly send me latest law underwriting) regarding to my concern here.
Best,
Can I rent my current townhouse or not? Here is the background information:
I am currently under the process of purchasing a new house, and am now considering rent my townhouse in Anna Ct. out. I called HOA tonight, and was shocked to hear that she said we had to be put to a waiting list for renting the townhouse out. She said this was to ensure that our owner/rent ratio is kept to an adequate level such that the potential home buyer would not be required to put 20% down payment when they buy one of our unit.
When we purchased our unit three years ago, below was what we learnt from the HOA officer (an email discussion between previous president and current HOA board member) :
________________________________________________________________________
From: ***
Sent: Saturday, November 14, 2009 5:00 PM
To: ***
Subject: Urgent. Information on proposed changes to Gov Docs
***************** previous president :
Dear Neighbors,
This Sunday from 1 - 3 is a gathering at **** house to discuss proposed changes to the governing documents. The new board made numerous changes to these documents after they were approved by the Association's legal counsel. The changes of most concern to me are:
In the Declaration: Leasing Restrictions; below is my correspondence with the Board and the Association's legal counsel's information on the matter.
Had the Board not changed the Amended and Restated Declaration as sent to them and made the comment regarding the lower % of rental homes, I would not have thought to investigate exactly what rental restrictions/requirements are currently in place by lenders, Fanny Mae, Freddy Mac, etc..
Here is what I learned:
Our Association is not a condominium, organized under the Condominium Act, but rather, is a Planned Unit Development, a Class 1 Planned Community subject to ORS 94.550 - 94.783. Gabriel Woods is a single family attached home community, each property includes the land. As such there are no rental/leasing restrictions placed on our community by any lender or entity who purchase loans in the secondary market.
Learning this made sense to me as the attorneys had said that this provision in our documents is unenforceable in law. This also explains why there is no provision in the statutes, ORS 94.55 which govern communities such as ours, regarding leasing restrictions. Also, an Owner who wants to lease their home, need not have permission from the Association and it doesn't matter how many homes are leased or the rental period. Additionally, no lender can refuse a loan, a loan modification or refinance on a home in our community based on the number of homes that are leased.
There are some owners who have concerns about getting financing based on comments made by friends, associates. Having learned that restrictions only apply to condominiums I am thinking that they were referring to a condominium sale/purchase not a Townhome/Single Family Home.
Our legal counsel, ****, at **** wrote this:
You are correct that Fannie Mae, Freddie Mac, HUD/FHA, etc. have certain project eligibility requirements and underwriting guidelines for condominiums (including requirements with respect to a certain number of units being owner-occupied). These project eligibility requirements and underwriting guidelines only apply to condominiums and not subdivisions or planned communities. There are some issues with respect to whether such rental restrictions are enforceable.
Considering all of the above then, I believe it is in order to have a conversation about removing Sections 2.7.1 - 2.7.5 Of Use of Property, leaving in sections, 2.7.6 - 2.7.9 and adding the stipulation that a Townhome may not be rented for transient/motel purposes.
*************Current board member:
A few comments in regards to this issue:
The reduction in the ratio of homeowners/renters was an issue that has been brought up more than once to our board during the last 2 years, I brought it up several times in emails and it was discussed in both the small homeowner meetings that were held at my home for those of us who wanted to openly discuss the new documents that were presented to us as homeowners by the former board. We provided that feedback via survey monkey for the former board to consider. It's unfortunate that we have incurred additional legal costs to discuss something that should have been known and corrected before it was presented for us to approve.
I spoke to **** with NW Mortgage Group today, 11/16/09, and he confirmed that according to his underwriters if the deed to our townhomes include the land then, as it stands today, our homes are considered attached single family homes and owner/renter ratios do not come into play during the financing of our homes. His underwriters are located in the same office and he can be reached at***.
With that being said I still think as a community it would behoove us to maintain a higher owner to renter ratio to maintain the integrity and "value" of our homes and community. Owners have a vested interest in keeping and maintaining their community.
********me:
After that, I, as a home owner, have not received any information regarding change of HOA policy about renting. This is truly a bad season to sell our townhouse, because the market is just about to rise, and we expect this property will be gaining value in the years to follow. If we are forced to sell our townhouse due to the HOA policy, we will be losing huge amount of money by putting the townhouse to market in the bad time. This is not me alone. HOA board member mentioned that some others are also on the “waiting list”. I want to check with you and make sure that we still have the right to rent our townhouse out. I believe HOA is to protect the rights of all homeowners, and is to bring benefits to all as a community. It will be extremely important for owners to learn what is the current lawful policy, and when that became effective if any changes have had been made.
What is the latest law in my case? If the law is still the same, can HOA document over write the law? Or, HOA document is unenforceable in law. HOA can not force us not to rent out our townhouse? I will extremely appreciate if you could give a reply (and possibly send me latest law underwriting) regarding to my concern here.
Best,