HOA Monthly Fee for Owners Choosing to Rent Their Condo (Atlanta: leasing, condos)

[Josephine280]

My condo is located in Midtown Atlanta. The HOA recently instituted a $100 monthly fee to all owners who rent their units, and it indicated this fee will be deposited in the general reserves fund. The bylaws already limit the number of units that can be rented, requiring an 85% owner-occupied rate. Owners must complete an application to rent their units.

The HOA claims the rationale for this fee (to be paid every month for the duration of the rental period) is to account for:

1. The "extra work" to staff caused by renters (when challenged on what, exactly, the extra work was, the items did not differ from the staff's current duties or work any other resident would cause, which is already covered by condo fees. E.g., noise complaints, smoke/odors from units, concierge greeting visitors, etc.)

2. Nearly all other condos in Midtown charge this fee to owners who rent. (My parents never accepted the "everybody else is doing it" excuse when I was younger--HaHa)

If you live in a condo in Atlanta, does your HOA charge a monthly fee to rent your unit? What is their rationale for this charge, and does it go into general reserves? Has the fee been challenged by any owners?

This fee sounds like the HOA is raising money on the backs of owners who rent, and I don't believe the rationale passes muster.

[IC_deLight]

Originally Posted by Josephine280

My condo is located in Midtown Atlanta. The HOA recently instituted a $100 monthly fee to all owners who rent their units, and it indicated this fee will be deposited in the general reserves fund. The bylaws already limit the number of units that can be rented, requiring an 85% owner-occupied rate. Owners must complete an application to rent their units.

The HOA claims the rationale for this fee (to be paid every month for the duration of the rental period) is to account for:

1. The "extra work" to staff caused by renters (when challenged on what, exactly, the extra work was, the items did not differ from the staff's current duties or work any other resident would cause, which is already covered by condo fees. E.g., noise complaints, smoke/odors from units, concierge greeting visitors, etc.)

2. Nearly all other condos in Midtown charge this fee to owners who rent. (My parents never accepted the "everybody else is doing it" excuse when I was younger--HaHa)

If you live in a condo in Atlanta, does your HOA charge a monthly fee to rent your unit? What is their rationale for this charge, and does it go into general reserves? Has the fee been challenged by any owners?

This fee sounds like the HOA is raising money on the backs of owners who rent, and I don't believe the rationale passes muster.

Out of curiosity, is this condo association managed by a management company?
If so are these fees really going to the management company as opposed to the condo association?
There really is no excuse for these fees.

[ATL Golfer]

There is a new trend going around town where HOA's are outsourcing their rental monitoring to a company called RMS. In other cases management companies are offering this as an additional service/cost to the base contract. I am all too familiar with this fee and in my opinion it is illegal in its implementation.

In a community I know of, Cornerstone Village at 800 Peacthree, they have been charging $500/year. The $100/mth you report is absolutely absurd. $1,200 a year?!?

Is your HOA actually being charged $100/mth per rental by a 3rd party (RMS, the mgmt company?) or does the board handle the leasing process internally (like every board did for decades until recently).

Here is my concern with this practice:

The reasons given to leasing permit holders (landlords) as to why the 3rd party was hired to manage the leasing process.

- To manage the waitlist. Why are people who hold a leasing permit as permitted under the governing docs responsible to pay for people sitting on the waitlist? Maybe charge the people the on the waitlist a fee? Why are permit holders subsidizing these owners?

- To police the community for illegal renting (renting without a permit): Again, maybe charge those individuals who are illegally renting the associated fees? Why are permit holders paying for people to illegally lease their unit? On what planet does this make sense? Policing illegal renting benefits the entire community. The entire community needs to chip in.

- It is commonplace - What a load of crap that response is. Especially since it isn't.

It is insane for me that someone pays a 3rd party what amounts to annuity - especially for when situations remain static. For instance if an owner has the same tenant for 5 years and nothing changes, how do they justify that someone did work that amounted to $500 in fees on the year that can be directly attributed to that unit?

HOA's are going to get sued on this matter. They are keeping the fee to an acceptable nuisance fee for most, but someone is going to say "enough is enough".

RMS (Rental Management Services) sells their services to boards as "its a fee passed onto landlords, brilliant!". What they really need to be saying to boards is "to limit your liability this fee needs to be spread out across the community evenly." RMS really needs to look at its practice of billing that is based on the number of units leased when their services benefits all.

Bottom line is boards don't want to the job they signed up for, pass the work onto someone else. The owner who lease their units did not create this fee for the association, the board did.

What is crazy to me, in the case of Cornerstone Village, is that the HOA is charging a fee above and beyond what RMS charges. I'm not sure what RMS charges per leased unit but the HOA is padding that figure to reach the $500 fee. WHAT THAT MEANS IS the HOA is passing on fees to individual owners that the HOA itself is not incurring - I cannot begin to tell you the legal ramifications for participating in this practice. That is NOT what the governing docs state in any of these communities. The HOA cannot just simply profit off units being leased. They can only pass on fees in which they incur.

I'll try to say in more easily understood terms.

If your unit causes a need for a 3rd party to become involved (maintenance related, legal work etc) the HOA will take that bill and passes it onto you. It will show up on your ledger. What the HOA at Cornerstone Village is doing is taking that RMS bill (call it $25,000 in total for all units) and adding tens thousands of dollars on top and passing that final figure onto landlords (call it $40k+/-). Landlords are in effect subsidizing all other owners when it comes to the overall community budget. Landlords are being told they need to pay MORE than their fair share of common expenses. The folks on the board over there need to take a hard at what they are doing before they cause a massive legal liability expense for its community.

[Josephine280]

Originally Posted by IC_deLight

Out of curiosity, is this condo association managed by a management company?
If so are these fees really going to the management company as opposed to the condo association?
There really is no excuse for these fees.

The association has a management company to run the day-to-day needs of the building. There is not a rental management company dedicated to managing rentals—the condo management does this (and always has) as part of its services.

[Josephine280]

Thank you for your detailed response. It will be very helpful in my dealings with the board on this issue

[ATL Golfer]

Who manages your property? Feel free to PM me.

[IC_deLight]

Originally Posted by Josephine280

The association has a management company to run the day-to-day needs of the building. There is not a rental management company dedicated to managing rentals—the condo management does this (and always has) as part of its services.

It's not a "service", it is bilking owners. There is no end to the schemes management companies engage in to rip off the owners as well as the client HOA/condo association. I suspect this "fee" never shows up on any books of the condo association. Your board probably does not see bank statements but only "financial statements" prepared by the management company.

[mojo101]

Tenants are not property owners,if I am looking to buy a condo,I would not want to buy into a building with high rental units,would you?
I used to live in a CO-OP building with 3 shifts doorman,bylaw said no rental and a nurse who works late shift shared her unit with a male tenant,she claimed he is her relative?She has a one bedroom unit.

[hereticiam]

Originally Posted by IC_deLight

It's not a "service", it is bilking owners. There is no end to the schemes management companies engage in to rip off the owners as well as the client HOA/condo association. I suspect this "fee" never shows up on any books of the condo association. Your board probably does not see bank statements but only "financial statements" prepared by the management company.

Yes it is bilking owners.

It is likely that when you sell the condo the same association will charge you $500-$1000 to give your buyer condo bylaws and no objection certificate. I sold two condos in another state where I had to pay $100 fees whenever I had a new renter. I had to pay additional fee of $1000 when I sold the condo. However monthly dues were the same for owners and investors.

[urbancuriosity]

OP, does the company distinguish between longer term renters (say 6 months +) vs short term renters (like an AirBnb)?