Source: http://realtytimes.com/rtnews/rtcpages/19980909_condo.htm

THE RULES OF RENTING CONDO BY Marcie Geffner  

1. The meaning of a condominium.

  А condominium, or condo for short, is a form of housing tenure. It is the legal term used in the USA and in most provinces of Canada for a type of joint ownership of real property in which portions of the property are commonly owned and other portions are individually owned. In Australia and the Canadian province of British Columbia, the legal term for this is known as strata title. Colloquially, the term "condo" is often used to refer to the apartment unit itself in place of the term "apartment". This clearly signifies ownership of the property.

Often, it consists of units in a multi-unit dwelling (i.e., an apartment or a development) where the unit is individually owned and the common areas like hallways and recreational facilities are jointly owned by all the unit owners in the building. It is possible, however, for condominiums to consist of single family dwellings: so-called "detached condominiums" where homeowners do not maintain the exteriors of the dwellings, yards, etc. or "site condominiums" where the owner has more control over the exterior appearance. These structures are preferred by some planned neighborhoods and gated communities.

A homeowners association, consisting of all the members, manages the common areas usually through a board of directors elected by the members. The same concept is also used in other countries with different names, such as "unit title", "commonhold" or tenant-owner's association. Another variation of this concept is the "time share". Condominiums may be found in both civil law and common law legal systems.

 2. The Rules of Renting a Condo

To an unsuspecting tenant, a condominium looks a lot like an apartment unit. Yet tenants moving into a condominium face an environment that's quite unlike a typical apartment building.

Unlike an apartment building, a condominium complex has multiple owners, who own separate areas individually and common areas collectively. Decisions about common areas are made by the homeowners' association (HOA) or its board of directors. Larger complexes typically have a management company, which is hired by the HOA to handle bookkeeping, maintenance contracting and other day-to-day matters.

Although tenants are residents of the condominium complex, they are not entitled to vote at HOA or board of directors meetings because they don't have an ownership interest. The only exception occurs when an owner gives the tenant a power of attorney, which appoints the tenant as the owner's representative to the HOA. That type of arrangement is rare because it gives the tenant some of the owner's legal rights. If the tenant is a relative of the owner, misunderstanding may arise about voting rights. However, the confusion is only superficial because a family relationship is largely irrelevant. The owner retains his or her rights, and the relative is treated like any other tenant.

Tenants may or may not be welcome at HOA and board meetings. "Some tenants attend the board of directors meetings every month to observe. Usually, they are tenants who are looking to buy [a condo in the complex] in the future, so they want to become familiar with how the association operates," says Stephen Bupp, owner of Condominium Ventures Inc., a condominium management company in Greenbelt, Maryland, and president-elect of the Community Associations Institute, a nonprofit organization in Alexandria, Virginia.

Some HOAs also allow tenants to speak at these meetings on their own behalf, even though they aren't allowed to vote. "If the tenants do say something, it's usually taken (into consideration). The owners don't ignore their comments," says Bupp.

Another major difference between an apartment building and a condominium complex is that condominium associations have covenants, conditions and restrictions (CC&Rs), which govern everything from the elections of HOA officers to the allocation of parking spaces. Unlike the rules of an apartment building, CC&Rs are legally enforceable documents that apply to tenants as well as resident owners. "Tenants must abide by the CC&Rs and all the other rules and regulations, but the owner of the condominium is the ultimate responsible party. If the owners don't protect themselves, the tenant can cause problems and the owner ends up receiving notices from the association about rule violations," says Bupp. HOAs can—and do—impose fines if the CC&Rs or other rules are disobeyed. And those fines can be levied even if a tenant was responsible for the violation.

Condominium landlords should give their tenants a copy of the CC&Rs. Tenants should take the time to read the CC&Rs and ask for clarification of any rules they don't understand. Condo rental agreements should have a paragraph stipulating that the tenant has been given the CC&Rs, agrees to abide by them and will be financially responsible for any fines levied against the owner as a result of the tenant's actions. "The owner of the condominium should put in [the rental agreement] that the tenant must follow the CC&Rs and rules and regulations and that any violation will allow the owner to take action against the tenant," says Bupp.

Tenants who rent a unit in a condominium complex, rather than a traditional apartment building often are in for a few surprises about community life. Common areas of misunderstanding include rules and regulations, repair responsibilities and the consequences of the owner's nonpayment of homeowner association (HOA) dues.

An association's rules and regulations can be found in its covenants, conditions and restrictions (CC&Rs), which govern everything from the elections of HOA officers to the allocation of parking spaces. Unfortunately, inexperienced owners often neglect to provide a copy of the CC&Rs to their tenants. "The tenant moves in, but the owner doesn't put forward all the disclosures about things like the number of parking spaces they are allowed, the number of people they are allowed to have in a one, two or three-bedroom condominium and whether there are specific rules and regulations for noise, pets and the recreational facilities," says Stephen Bupp, owner of Condominium Ventures, Inc., a condominium management company in Greenbelt, Maryland, and president-elect of the Community Associations Institute (CAI), a nonprofit organization in Alexandria, Virginia.

Bupp says parking is one of the biggest issues. "Many communities have limited parking facilities and rules limiting the number of vehicles (that can be parked). When the tenant rents the home, they are unaware that the rule exists. They get themselves and the owner in trouble," he says. "The parking, the number of people (living) in the home and pets usually are the biggest trouble."

Tenants often are also in the dark about what to do if the condominium they are renting needs repairs. The difficulty is determining whether the individual owner of the HOA is responsible for a particular repair. Generally, if the problem concerns the individual unit, the tenant must contact the owner/landlord to have the problem resolved. Unlike an apartment manager, the association's management company rarely handles repairs within the individual units. If the needed repair is in a common area (e.g., an entry way, hallway or recreation facility), the tenant often can contact the HOA or the HOA's management company directly. If a problem in an individual unit also affects a common area (e.g., a water leak is dripping into subterranean parking), the tenant probably should contact both the owner and the HOA. In some instances, the HOA or its management company will make the repairs, then bill the owner for his or her individual share of the costs.

Perhaps the greatest area of concern for tenants arises when the owner fails to pay the association dues or assessments. Few tenants have any notion of this possibility or the consequences. "The association can be taking action against the owner and the tenant might not have any idea what's happening. One day, a foreclosure notice is advertised or lawsuit papers are taped to the front door," says Bupp. "Some associations have the power to file a lawsuit, obtain a judgment and collect the rent to offset the nonpayment of the condominium fees. The tenant usually is very confused (about who to pay) and should seek legal help."