Rental Compliance |
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Community Associations help retain and improve the standard of living and property values within a community. While all owners sometimes wish that a particular restriction did not apply to them, most are grateful that the restrictions apply to their neighbors. In some cases their neighbor may not own the home; but have leased the home.
Through the direction of your Board of Directors, the Management Firm should serve your community by coordinating common needs, overseeing and enforcing the governing documents (Covenants, Conditions and Restrictions, Articles of Incorporation, By Laws, Design Guidelines and Rules & Regulations). The communities governing documents may allow rentals; but in most cases the governing documents are not specific and allow broad interpretation. An example of the verbiage may be “each residential dwelling unit constructed on the Property may be occupied only by a single-family. Any dwelling unit may be rented to a single-family tenant from time to time by the owner, subject to the Association Rules”. Unfortunately for some community associations, especially the owner living next to the non-compliant renter, governing documents that are not specific or silent allow on-going problems and aggravations.
The following is an example of how community Board of Directors can clarify the governing documents Covenants, Conditions and Restrictions (“CC&R’s”) with a Resolution:
RESOLUTION OF THE BOARD OF DIRECTORS OF
(NAME OF HOMEOWNERS ASSOCIATION)
RELATING TO RENTAL RESTRICTIONS
The Board of Directors of the (association name here) (“Board”), having duly noticed and convened a meeting of the Board pursuant to (quote _.R.S., article and section here) for (association name here-recorded as Instrument No.), in the records of ____ County, (State) (“CC&R’s), hereby adopts the following resolution by a majority vote;
WHEREAS, under the present policy stated in (state article, section of CC&R’s here) and Rental Resolution dated _______, 200_ , WHEREAS, circumstances have arisen that indicate to the Board that the best interest of the Association are best served by allowing Owners to rent or lease their Dwelling Units for a term of not less than six (6) consecutive months, and require owners provide rental information and a transfer fee to the Association. Further, in accordance with the single-family occupancy requirements of (state article, section of CC&R’s here), timeshares will not be permitted;
WHEREAS, having duly deliberated on and investigated the policy on rental restrictions, the Board adopts the following Resolution to be inserted in the minute book of the corporation;
IT IS HEREBY RESOLVED: Owners shall not rent or lease their Dwelling Unit for a term of less than six (6) consecutive months. Nor shall any Owner enter into any timeshare or other transaction that has the effect of a timeshare for a term of less than six months (6). Leases shall be for terms of not less than (6) consecutive months. The owner shall not be required to divulge the monetary consideration for the lease, conditions of the lease that pertain to options to purchase or the credit history of Tenants. Upon request of the Board, the Owner shall provide the Board with a copy of the lease, and any amendments or extensions of the lease. On all rentals, the Owner and Tenant shall fill out the attached Residential Control Form and Crime-Free Lease Addendum, or as later modified by the Board. The Owner must also pay a $200.00 registration fee to the Association not less than yearly for each rental transaction;
THIS RESOLUTION was adopted on (date adopted) after full deliberation and a majority affirmative vote of the Board.
| _________________________ |
_________________________ |
| Director |
Director |
| _________________________ |
_________________________ |
| Director |
Director |
Once the Rental Resolution has been adopted, a copy of the Resolution must be sent to the community membership before the Rental Resolution may be enforced. Notification (mailing of the Rental Resolution to membership) requirements differ for each communities Governing Documents or state requirements, so be sure to verify the timeframe between notification and enforcement.
The following is a sample letter, rental control agreement form and crime-free lease addendum that should be mailed to all off site owners.
Name of Owner
Address
Address
Lot ______
Dear Owner,
This letter is being sent to all off-site Owners in (Name of Community). Pursuant to the CC&R requirements noted below and to update the Associations Owner records, please complete the forms included with the letter and return as specified below by ____________.
A copy of the CC&R’s, Paragraph ____, is enclosed. There are two forms included with this mailing, Rental Control Agreement Form and Crime-Free Addendum to be attached to the lease that covers rentals of homes within (Name of Community). Please be aware you must complete a (state name) form supplied by the state, and it must be completed and submitted to the ____ County Assessor’s Office for all residential rental property. If your home is a rental and is not being assessed as a rental, the state can impose a fine of $_____. This is a State Statute requirement covering Residential Rental Property. If you have any question regarding this form, please contact the ____ County Assessor’s Office.
Please be sure to include a copy of the Rental/Lease Agreement along with the completed Community Non-Resident Owners Renter/Lessee Information Form and return the completed form along with Renter/Lessee Agreement with the Crime–Free Addendum to the address noted above. If you have any questions regarding completion of the Association Non-Resident Owners Form, please contact (Name of Management Firm) at the telephone number or address noted above, or you may e-mail.
Thank you for your cooperation in completing and returning the Association Form expeditiously so that the Associations records can be updated.
Sincerely,
Rental Control Agreement Form
(Association name here)
Member (Landlord) Name: ____________________________________ Lot#: ________
Property Address: _________________________________________________________
Member Mailing Address: __________________________________________________
Member Social Security Number: ____________________________________________
Name of Management Company (if applicable): _________________________________
Address of Management Co.: _______________________________________________
Management Co. Phone: ____________________ Representative: __________________
Tenant Name: ___________________________________ Length of Lease: __________
Tenant’s Phone: _____________________________ Number of Children: ___________
Number of Vehicles on Property: _______________
Vehicle No. 1: License #: ______________ Make: _____________ Color :__________
Vehicle No. 2 License #: ______________ Make: _____________ Color: __________
Signed Crime Free Lease Addendum Attached: Yes ______ No______
Rental Property Registration Number: _________________________________________
Date of Payment of Registration Fee: _________________________________________
I (we), __________________________________________________________________
____________________________ have received, read and agree to abide by the CC&R’s, By-Laws and Rules and Regulations of (association name here) (and as altered or amended) knowing that if they are not adhered to, I will ultimately be fined for violations. All the parties acknowledge and agree that (association name here) is a third-party beneficiary of the rental agreement and can enforce all its terms against the tenant and can enforce all remedies under the Arizona Tenant and Landlord Laws against the tenant for violations of the Association’s Community Documents and the rental agreements. The rights granted to the Association herein specifically include the right to evict the tenant(s). The Member expressly grants to the Association a Power of Attorney for these purposes, coupled with an interest. In no event may less than an entire unit be rented.
| _________________________ |
_________________________ |
| Signature of Tenant |
Date |
| _________________________ |
_________________________ |
| Signature of Member (landlord) |
Date |
Please return this completed signed and dated form to us using the enclosed self-addressed envelope.
Crime Free Lease Addendum
________________________________________
In consideration of the execution or renewal of a lease of the dwelling unit identified in the lease, Owner and Resident agree as follows:
Resident, any members of the resident's household or a guest or other persons affiliated with the resident:
1. Shall not engage in criminal activity, including drug-related criminal activity, on or near the said premises. "Drug related criminal activity" means the illegal manufacture, sale, distribution, use, or possession with intent to manufacture, sell, distribute, or use an illegal or controlled substance (as defined in Section 102 of the Controlled Substance Act [21 U.S.C.802])
2. Shall not engage in any act intended to facilitate criminal activity
3. Shall not permit the dwelling unit to be used for, or to facilitate criminal activity, regardless or whether the individual engaging in such activity is a member of the household, or a guest
4. Shall not engage in the unlawful manufacturing, selling, using, storing, keeping, or giving of an illegal or controlled substance as defined in _.R.S. (section), at any locations, whether on or near the dwelling unit premises
5. Shall not engage in any illegal activity, including prostitution as defined in _.R.S. (section), criminal street gang activity as defined in _.R.S. (Section) and _.R.S. (section), threatening or intimidating as prohibited in _.R.S.(section), assault as prohibited in _.R.S. (section), including but not limited to the unlawful discharge of a weapon, on or near the dwelling unit premises, or any breach of the lease agreement that otherwise jeopardizes the health, safety, and welfare of the landlord, his agent, or other tenant, or involving imminent or actual serious property damage, as defined in _.R.S. (section)
6. VIOLATION OF THE ABOVE PROVISIONS SHALL BE A MATERIAL AND IRREPARABLE VIOLATION OF THE LEASE AND GOOD CAUSE FOR IMMEDIATE TERMINATION OF TENANCY. A single violation of any of the provisions of this added addendum shall be deemed a serious violation, and a material and irreparable non- compliance. It is understood that a single violation shall be good cause for immediate termination of the lease under _.R.S. (section), as provided in _.R.S. (section). Unless otherwise provided by law, proof of violation shall not require a criminal conviction, but shall be by a preponderance of the evidence
7. In case of conflict between the provisions of this addendum and any other provisions of the lease, the provisions of this addendum shall govern
8. This LEASE ADDENDUM is incorporated into the lease executed or renewed this day between Owner and Resident.
| _________________________ |
_________________________ |
| Signature of Landlord |
Date |
| _________________________ |
_________________________ |
| Signature of Tenant |
Date |
Community Board of Directors and Management Firms are not trying to eliminate the right of an owner’s ability to lease their home or imply that all tenants are in non-compliance with the governing documents or bad neighbors. We are only stipulating a clarification to the Covenants, Conditions, and Restrictions.
Working as a partner with the Board of Directors and Committees the Management Firm should strive to preserve a beautiful community by keeping it a safe, healthy and happy place to live; but it is also the responsibility of all homeowners of the community.
Jan Lines, AMS®
Director of Marketing and Accounting
Jomar Association Services
Chandler, AZ
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