Board regulations regarding allowable percentage rentals

research by Richard E. Gordon
richard@gordonrichard.com
last updated April 14, 2010

Many owners in our condo building are concerned that a growing percentage of our units are rented. Renters generally are not as concerned about the upkeep of the building and following the condo rules as owner-occupiers would be. Down the line, too, those who wish to own may find it more difficult to secure mortgages for a unit in a development where a high percentage of occupants are renters. Can the Board stipulate what the maximum percentage of rentals can be?
The research results follow:

1. Online Condo Owners magazine points out special problems that Boards will face as more and more owners rent their condos out on their own through the Internet rather than using rental agencies. Licensed rental agencies usually are more concerned about getting tenants that will follow condo regulations while an absentee condo owner desperate for a renter may grab onto the first renter that comes along.
   
   Although I could see nothing here regarding restricting percentage of rentals, this article still merits Board attention especially since it points out that "Condominium associations should take a hard look at strengthening their governing documents with regard to collections and enforcement as they continue to deal with the new challenges [increasing percentage of rentals] that lie ahead."
   
2. The 2009 Florida statutes regarding condominiums. Any document amendments regarding rentals the Board and owners may pass will apply only to those owners who approve of such restrictions and those owners who purchased units after the amendment is passed. See item 13 in this document from the State of Florida.
   "(13) Any amendment restricting unit owners' rights relating to the rental of units applies only to unit owners who consent to the amendment and unit owners who purchase their units after the effective date of that amendment."
   
   I believe this means that if our Board passed an amendment that was approved by a majority of the owners regarding the percentage of allowable rentals, the minority of owners not approving the amendment would not be bound by the amendment.
   
3. The Clark Howard Show. Some loan companies will not give mortgages to perspective owners in condo buildings where more than 25% of the units are rented. This site gives information in general rather than just for Florida.
   
4. A Pinellas County Association that has 75% renter-occupied units faces having many Section 8 applicants. The article's author writes, "I advise establishing a screening policy that has been approved by the association's attorney. Once you have an approved policy that is inclusive of document rights and your attorney's approval, send a copy to all owners. That policy should include requirements and limits for approval. I must warn you that such background investigations can require the association to maintain strict confidential control of records and very strict record keeping."
   
   Is our screening policy taking into consideration the possibility of having more rental applicants? We must be very much aware of Florida's Fair Housing Act when screening possible renters.