Seasons Change–Dealing with Transient Owners or Renters in a Condo, Co-Op or HOA

I wanted to take a few moments this week to talk about a question that comes up in almost every resort-area shared ownership community (condo, co-op or HOA)–how do you deal with the influx of new or transient residents in your community? While renters can be very nice people, and many make great neighbors, it’s also true that, unlike owners, renters have no skin in the game, and therefore typically are much less careful about the rules and taking care of community property. So in every “new neighborhood”, having a plan in place for dealing with seasonal residents is crucial.

First off, it’s critical that any association, no matter how small, has appropriate security rules in place to manage entry into the property. If your community is completely open to the public, with no doors or gates of any kind, you really have to expect to have no ability to manage this issue. While totally open communities are a nice concept, in my opinion they are not worth the loss of security for your residents (except perhaps in very remote, quiet areas of the country where security concerns are a complete non-issue). In most resort communities, however, security is paramount, as you’ll find that visitors who have nothing to do with your neighborhood frequently try to use the facilities by sneaking onto the property. Why should you care? Well for one, having strangers on your property poses a danger to residents, as even the nicest-looking group of people may contain criminals. Second, anyone who is injured on the property is going to become a problem for the association, whether or not they were allowed to be there. Third, complete strangers have absolutely NO concern for the integrity of the property they are using, and are much more likely to damage that property than even a renter (who at least knows that they have to live with their neighbor/owners for an extended period of time).

In my own beach condominium, we have had many strangers from the beach attempt to enter our property. We have found people using our pool chairs and beach chairs, and even just wandering around the deck. I hope everyone reading understands why that’s a serious safety and liability concern, and why we’ve cracked down on our own access rules (including requiring all authorized guests or owners to wear brightly-colored wristbands at the pool for easy verification).

The second issue, and this again is an issue of basic security, is knowing which residents are authorized to be on your property. While it’s unrelated to the seasonal issue, we have had situations where jilted lovers/ex-wives have attempted to enter an owner’s unit, many times with an express threat of harm. We also had a terrible domestic violence issue in our building, a double murder that, while not a security issue in itself (the murderer was a renter who was authorized to be in the unit, and had access keys), clearly highlights the critical nature of controlling ingress and egress into a neighborhood. Ultimately, this is an issue that needs to be handled by management and the board. Not only do they need specific procedures at entry points to check for access authority, and to make sure that new residents are properly registered and vetted when appropriate, but every employee needs to keep their eyes open for anything strange going on in a unit or home. And every neighbor, for that matter. On the night of the murder in our building, the shots were reported by unit owners in neighboring units, which allowed our security staff to respond as quickly as possible.

Third, if at all possible according to your documents, limit the number of rentals allowed in any property during the year. Long-term renters are far more likely to be good neighbors than short-term renters who are essentially using the property as a hotel. It’s true that in the current economic environment many investor-owners may need constant rental turnover to keep their heads above water, but the potential for long-term damage to the community is significant, both in terms of reputation, wear and tear and overall safety. That, in turn, reduces property values and makes long-term success for owners impossible. So despite the natural thirst for short-term gain, a prudent investor should support attempts to limit the volume of renters in a community whenever practical.

Last, don’t be afraid, as a board, to take action against owners who are violating your access and rental rules! You may feel uncomfortable confronting your neighbors, but I guarantee you’ll feel a lot less comfortable if something terrible happens to one of them as a result of an unauthorized trespasser. Have consistent, strong rules, and instruct your management to enforce them every single time they’re violated. That’s the only way to insure the integrity of the community.

Again, anyone who has any questions about condos, co-ops or HOAs please email me at–I’d love to answer some more questions in my future blogs.

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