Parkshore Plaza, one of the newer luxury condominiums in downtown St Petersburg, has a minimum rental period of 90 days, with a provision that an owner can only rent it out once a year.
I thought I knew what this means - you could rent it out for the winter season, for example, but then you'd have to either occuply it yourself or leave it empty for the rest of the year - you couldn't also rent it out for the summer. That makes sense - most condos do want to have stability, and this allows an owner to benefit from a seasonal rental or a temporary absence, while keeping the property from becoming a hotel.
One of my clients rented his condo, furnished, for a year. At the end of the year, the tenant wanted to extend for another year (at a reduced rent, but that's fodder for anothr post) which the owner agreed to. The tenant's situation changed, and after a few months into the second year, needed to terminate the lease.
OK - then we'll find another annual tenant. The first rental was for 15-16 months, and the owner is prepared to find another tenant for a year. Hold on, says the Condo manager - you've already rented the condo for part of the "second year" so you can't rent it again. It has to stay vacant for the next 8-9 months until you start another year. I don't understand how one 15 month rental and another 12 month rental would be a violation of renting it out only one a year.
This just doesn't make sense - there was no turnover in occupants, there was no wear and tear of moving in or out - how can this be a sensible interpretation? Further, the manager says that the "one rental a year" is spelled out in the condo docs rather than being a Rules and Regulation - i.e., major problem to change!
Have any of you come across the situation before? How was it resolved?
I've never seen this before but the Northern Virginia market is not geared towards vacation rentals. Hopefully one of our condo experts can help.
Sharon: Very interesting situation. Our condo communities here in Atlanta (not a vacation type rental) require leases to be 1 year in length. But, they do not have any requirements that you can only "lease it once per year." Perhaps there can be some discussion with the condo board that the unit was in fact leased for 1 year, but the tenant has had to move out. I think they need to look at it on a "case by case" basis so that they are protecting the property from being a "hotel", yet realizing that circumstances do change. It certainly sounds like the intent of the owner was to follow the rules.
We are facing our own challenges here with people wanting to rent out condos they have not been able to sell, but the buildings have met their rental caps. If they rent it out illegally, and get caught by the board or property manager, it's a $25 PER DAY FINE until the renter moves out. OUCH!
Hope your client is able to present his case to the Board.
This is the whole reason I did not purchase a condo in St Petersburg back in '05 when I was sooooo close to buying one. Those ridiculous restrictions. I can understand where they are coming from, but it really can hurt the owners.
I agree that things should be looked at on a case by case basis, but then people will claim favorism or discrimination.
Will - thanks.
Thom and Ray - we have also concluded that an appeal to the Board is the course of action. What a difficult situation for owners unable to sell if they aren't allowed to rent at all.
Lisa - ironically, if the condo had said the minimum rental period was a year, which is more restrictive, it would have been simpler to follow.
Are there restrictions against sub-letting? I'd think you could solve this by having the initial tenant whose lease is completely kosher for the second year sublet to the interested "new" tenant.
Finally, I'd think it's worth a quick chat with a lawyer--one way to address this limit would be to ensure (in the lease) that a future tenant understands that they'd be on the hook for the full term's rent payment, even if they backed out. Here in CA, that provision would conflict with state law which says that the tenant would be responsible only for the rent and leasing expenses until the unit is re-rented. But the condo assoc. prohibits that re-renting. Given that inherent conflict, a lawyer might argue that the provision in the condo rules is unenforceable. I have no idea--I'm not a lawyer and am just making this angle up. But worth checking out---
And if there's no solution but for the owner to bear the risk that they forego a lot of rent at the whim of an "oops I made a mistake" tenant, then the units' value just went down by x%--and that might be a compelling argument for the remaining owners. They'd know that a very well-placed agent in St. Pete is going to make this point to every colleague and client she runs into !!!
Sounds crazy to me.. Hope you get it resolved!
I understand that condo associations try to keep the property values high, but sometimes they are just ridiculous!!
I can't say that I've come across that before... I'll definitely be watching to see how this pans out.
Maureen - yes, there are restrictions against sub-letting. I agree that having agents (and we all know we talk to each other) play up the rental issues is not good for property values.
Judy - me, too.
Mindy - Agreed. Their intent is good, but execution is not.
Jesse - should be interesting.