Re: Rental policies?
From: Kay Wilson Fisk (caseyjacketsgmail.com)
Date: Thu, 10 Nov 2011 12:46:14 -0800 (PST)
[Corrections to Par. 1]:
When our LLC was preparing to build our complex, not enough units had
pre-sold to be able to get a construction loan, so three members
purchased a total of five of the units [to use as rentals], and the
project was able to get started. ... At the same time, we were advised
that we needed an upper limit on rentals because banks/FNMA were
reluctant to make loans in condo projects [ with too many condos], so
we set the limit at 7 rentals to include the existing rentals but no
more.

[If I'm not mistaken, the HUD rental limit was c. 20-30% but was
raised to 50% in the last year or so, due to the sagging economy.]

Kay

-----Original Message-----
From: Kay Wilson Fisk [mailto:caseyjackets [at] gmail.com] 
Sent: Thursday, November 10, 2011 12:01 PM
To: 'Cohousing-L'
Subject: RE: [C-L]_ Rental policies?

> I don't like it.  Who gets to decide WHICH of the households gets to
rent?

First, a little background on Meadow Wood: When our LLC was preparing
to build our complex, not enough units had pre-sold to be able to get
a construction loan, so three members purchased a total of five of the
units, and the project was able to get started. In addition, one
family purchased a second unit for their parents, and a non-profit
purchased a "Guest Unit" to rent at below market rates for 1 year at a
time to a families that needed "a leg up." At the same time, we were
advised that we needed an upper limit on rentals because banks/FNMA
were reluctant to make loans in condo projects, so we set the limit at
7 rentals to include the existing rentals but no more. The bottom
line: our complex would not exist today if we had not pre-authorized
these 7 rentals.

In the meantime, the economy has tanked, and three families have
needed to move, but couldn't sell their units. The Guest Unit was
determined to be classified as a "Second Home" by HUD, and the other
two units have been granted 1 year, renewable, hardship "rental
ceiling exceptions."

Now, we are updating our Declaration to reduce the allowable rentals
from 7 to 5, to add a grandfather clause for existing rentals, and to
clarify a few issues. (One rental owner plans to sell his rental as
soon as the economy permits.) These amendments are as follows:

Amendments to MWCA Declaration (Final Draft)
-----------------------------------------------------------
10.3.1        Rental Ceiling. 
Except as otherwise provided in this section, the maximum number of
non-Owner Occupied Units in the Condominium at any one time shall not
exceed five (5) (referred to in the Declaration as the "Rental
Ceiling"). The Guest Unit, if any, shall be considered one (1) rental
unit and included in the total limit of five (5).

10.3.2        Rental Waiting List.
If a resident Owner wishes to rent his or her Unit but is prohibited
from doing so because of the Rental Ceiling, the Association may
establish a Rental Waiting List and provide rules therefore in its
rules and regulations.

10.3.3         Grandfather Clause: Pre-existing Rental Exception.
Units that are currently rented or leased as of [DATE], 2011, are
exempt from the reduction in the rental ceiling and may continue to be
leased/rented until the Owner, or owning entity, decides to sell the
unit(s). When the unit is sold or transferred to a new Owner, the
exemption will expire. Units with temporary exceptions allowing them
to be rented for a limited time are not covered by this grandfather
clause.

10.3.4        Exception. 
Where, on written application from a resident Owner, 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 limitations on renting contained in this section, and/or
where the Board further determines that variance from the policy or
policies contained therein is fairly in keeping with the purpose to
limit investor ownership of Units and would not detrimentally affect
the other Owners or the approval of the Condominium for 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 to be determined by the Board. A Unit
rented under a hardship exception granted by the Board under this
Paragraph shall not be counted as a non-Owner occupied Unit for the
purpose of determining whether a rental would cause the number of
non-Owner occupied Units to exceed the Rental Ceiling.

10.3.5          Resident Owner Restriction.
In order to protect the cohousing organizational structure of the
community, which is dependent upon voluntary participation in
community life, only units owned by resident Owner Members may become
rental units. No rental units may be owned by absentee landlords
except as permitted under 10.3.3 Grandfather Clause: Pre-existing
Rental Exception or 10.3.4 Exception.

Kay
Meadow Wood Cohousing
www.mwcondo.com



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