Live in a home governed by a condominium, co-op or homeowner’s association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers.
Question: Recently our HOA board instituted a $250 fee to those owners who rent, $500 if they rent to more than one tenant during the year. Can they institute a charge to only a select segment of the community? I suspect most, if not all, board members do not rent. I have asked if there is any enforcement of this policy, and I was told it is strictly voluntary disclosure. I know my neighbor just lies and says it’s his brother staying there. Do I have any recourse or is there an agency that I can turn to? Signed, J.H.
Dear J.H.,
There are several interrelated issues here. First, generally speaking, associations can only institute fees that are authorized by their governing documents. Here, this seems to be something that the board passed as a rule without any express authorization in the declaration. The declaration may say that the board has the right to charge an application fee for the purpose of approving leases, and that kind of fee would be legal. But the way you describe this fee, it sounds like a fee owed simply for the right to lease; and if the declaration otherwise allows owners to lease, a fee to exercise that right would be suspect.
Now, I do think that an HOA could implement a mandatory contribution of some kind attached to every rental of a lot, but that would need to be an amendment to the declaration, and not just a board made rule. So, right off the bat, I doubt this fee would be legally enforceable.
Further, the HOA Act provides, at Section 720.306, Fla. Stat., that “any governing document, or amendment to a governing document…that prohibits or regulates rental agreements applies only to a parcel owner who acquires title to the parcel after the effective date…or to a parcel owner who consents, individually or through a representative, to the governing document or amendment.” I have heard it argued (though I tend not to agree) that a fee associated with a lease is a “regulation” of rental agreements and therefore cannot be applied unless the leasing owner consents to the regulation. As far as I know this issue has never been considered by a court, but the argument exists.
With that said, you really have no recourse other than suing the association to ask a judge to declare the rule and fee unenforceable, as there is no state agency that has jurisdiction over these kinds of issues.
Question: Our condominium board has instituted a new policy of background checks for new purchasers. Since there is nothing in our governing documents that addresses background checks, are they able to do this? Signed, D.C.
Dear D.C.,
In a lot of ways, this is a very similar question to the one above. Most governing documents give boards broad authority to pass rules and regulations. The question is whether the rule is “reasonable.” Essentially, is the rule directly related to addressing a legitimate association interest?
The first question is what kind of authority do your governing documents give the board of directors concerning sales? If sales are totally unregulated, and if the board has no authority over sales at all, it’s difficult to see what they would be getting from a background check.
The information they get would be confidential. Even if they found out something objectionable, they couldn’t prevent the person from buying a unit in the community. So, in that situation, I can’t say what the board’s legitimate interest would be. I have heard boards argue that the background check may discourage the wrong type of people (whatever that would mean) from buying a property, but I’m not confident that would convince a judge.
But, instead, let’s assume that your declaration of covenants allows the board to exercise a right of first refusal, but it doesn’t say anything specifically about requiring a background check. It might very well have language stating that the board has the right to collect whatever information it needs to make an informed decision, or it might instead be left vague.
In any event, I think the board would have a stronger argument to require background checks in that situation. Of course, the further question that raises is whether the board can charge a fee for such background checks — that’s where we get back to the answer to our first question, and it likely depends on whether the board has authority to charge fees associated with the approval of sales.
Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living.” Email your questions to condocolumn@gmail.com. Please be sure to include your location.
This article originally appeared on Palm Beach Post: Florida HOA wants to demand background checks, demand rental fee. Is that legal?
Reporting by Ryan Poliakoff / Palm Beach Post
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