Rental Caps and Hardship Exceptions

With the economic crisis continuing and foreclosure rates still increasing, I have heard a lot of talk recently regarding rental cap hardship exceptions.  Many condominium and homeowner association boards of directors whose associations have rental ceilings are feeling the pinch between following their CC&Rs and facing unprecedented levels of claims of hardship.

A typical rental ceiling Hardship Exception leaves much discretion to the board:

Hardship Exception. Where, on written application from a homeowner, the Board determines that a hardship exists whereby, due to circumstances beyond the control of the owner, that owner would suffer serious harm by virtue of the limitation on renting contained in this Section 4.6, and where the Board further determines that a variance from the policies contained therein would not detrimentally affect the other homeowners or secondary mortgage market financing, lender approval or VA or FHA approval, the Board may, in its discretion, grant an owner a waiver of the Rental Ceiling for a temporary period not to exceed twelve (12) months.

So what can/should a board do in these trying economic trying times when balancing an individual owner's financial difficulty with the interests of the remaining homeowners?  Although each association should be considered on a case-by-case basis, I would not be averse to recommending boards exercise a bit more leeway by exercising a fairly liberal approach to granting rental cap hardship exceptions.

Perhaps granting a six-month lease, in lieu of a full year, may be the most appropriate compromise for boards whose associations have reached their rental caps, yet have owners who are experiencing severe financial strain.

If a board decides to grant a hardship exception, it should ensure it documents the basis with specific grounds, to make sure it does not open itself to claims by other homeowners of selective enforcement.

For more details on rental restrictions, rental caps or hardship exceptions, do not hesitate to contact Barker Martin, P.S. by selecting the “Contact” tab at the top of this blog page. 

  

What can/should a board do in these trying economic times when balancing an individual owner's financial difficulty with the interests of the remaining homeowners?  Although each association should be considered on a case-by-case basis, boards may exercise more leeway by exercising a conservative approach to granting rental cap hardship exceptions.

View Covenants: How Far Can a HOA Go?

Many homeowner associations have covenants within their CC&Rs that limit a homeowner's right to restrict a neighbor's view.  For a view covenant to be legally enforceable, it must be included within a validly recorded instrument, such as the association's declaration or plat.  The covenants may include structures (e.g., homes, detached garages, sheds, fences, etc.), vegetation (e.g., trees or bushes) or even vehicles.  The view covenants also may be absolute or discretionary.

An example of an absolute view covenant would be a "25-foot height restriction on all structures constructed on the plat."  A discretionary view covenant would be a "restriction on trees or other vegetation that impairs the view from an adjoining owner's property."  Both absolute and discretionary view covenants must be reasonable and applied uniformily.  It should be no surprise that there are many more disputes and litigation involving discretionary view covenants than absolute covenants.

To enforce a view right, a homeowner associaton may seek injunctive relief from a court.  Time ordinarily is of the essence.  For example, if an owner is in the middle of constructing a home that exceeds the view covenant's height restriction, the plaintiff association would want to move without delay.  If the association delays for an unreasonable amount of time in seeking judicial intervention, the offending homeowner may be able to rely upon a laches, acquiescence or waiver defense.  What this means is if the plaintiff had constructive knowledge of the offending party's actions and through his words or conduct represents that he will offer no opposition, then the plaintiff may be barred from stopping the homeowner's conduct, or at least be limited in obtaining the relief sought.

I have found that many boards delay enforcing view restrictions, and often these delays prejudice their abilities to obtain successful outcomes (or at least efficient and timely successful results).  Either these associations think (hope) the offending party will come around, or they do not want to incur legal fees in hiring an attorney. Remember, most CC&Rs contain provisions for the Association to recover its attorneys' fees and costs incurred in enforcing its governing documents.

If your association would like more information on creating or enforcing view covenants, feel free to contact Barker Martin, P.S. by selecting the "Contact" tab at the top of this blog page.