Posts Tagged ‘HUD’

Leasing Limits Conflict with HUD Lending Rules

December 11, 2014

Today this Connecticut-area condo lender posted some interesting analysis about HUD Lending and Lease restrictions.   The gist of the article is that the lender has seen some situations where the FHA has held that condo leasing restrictions violate HUD’s restrictions on free transfer of property.  Because these HUD guidelines are federal, they would apply across the country, even here in Idaho.

The entire post is worth reading.  It outlines why sometimes a condo association’s leasing restrictions can overstep what is permitted and thereby jeopardize the HUD-financing availability for an entire project.   For that reason, it suggests sticking to the specific limits authorized by HUD, and asserting nothing more:

In 2011, FHA announced that certain leasing restrictions are allowed.  This was made permanent by the Condominium Project Approval and Processing Guide (page 26).  Basically, it allows associations to

  • Set minimum and maximum lease terms
  • Require copies of leases and that they be in writing
  • Request the names of the tenants
  • Require that the leases conform to the legal documents, and
  • Set a maximum number of units that may be leased at any time.

I think I’ll keep an eye out for updates from this blog.  Good post!

Fire Escape Does Not Escape HOA Scrutiny

January 2, 2013

Stowecroft staircase

Wow, that’s some staircase.  The owner of the house nearly dwarfed by this neolithic structure doesn’t think the HOA should pay any mind.  She already received town permits, after all.  It is unclear from the local news coverage why she decided to spend thousands of dollars on this monstrosity without complying with her covenants.  We’ll have to watch developments to see if the HOA backs down or… escalates the conflict.

Update: HUD was 1,972 days late?

September 6, 2012

Just a quick update on the HUD duh.  Never an agency to miss a chance at a slam dunk, it appears HUD may have waited 2,072 days–that’s over five and a half years–to file a complaint in the case.  HUD are apparently supposed to act within 100 days.  Thanks  to Tampa Bay Online for the follow-up investigation and video.  www2.tbo.com

 

HUD Duh

September 5, 2012

OK, OK, I know.  Sometimes those fair housing issues are complicated.  Maybe there’s a close call.  Sometimes the HUD case inspectors  seem to have it out for you and the HOA.  But once in a while you just have to wonder what is going on with the American educational system.  Today Tampa area’s Townhomes of Kings Lake  gets the wag of the finger.

Tampa Bay Times

As reported by the Tampa Bay Times, who, as far as I know, has no reason to make a Gibsonton HOA look any dumber than the facts require, this association tried to enforce an occupancy limit and policy on a tenant family of eight, saying they “had too many kids.”  It sounds like the family has other issues going on, but from an HOA best practices point of view, this is not good.   Not good at all.

This is not a hot-button cultural question balancing on the definition of a family.  This is just plain, old, well-settled, illegal discrimination.  Don’t do it.

-J

The Unspoken Rule: Discrimination in Unenforced Covenants

August 9, 2012

Can something discriminatory written and recorded in your Idaho CC&Rs decades ago still pose a liability for your association today?  Today, a blog for the Orlando Sentinel discusses the state of the law in Florida, and recommends a professional review of governing documents to find and remove offending restrictions. Not surprisingly, in Florida’s litigious society, there are municipal and county fair housing regulations.  Florida associations have been found liable for discrimination for “publishing” rules and regulations that caused a tenant “emotional distress,” even where those rules are not enforced.  That 1997 decision is online here.

The question remains how to regard that decision and legal advice here in Idaho, where the legal climate is as different from Florida’s as Idaho’s high desert climate is different from Florida’s coastal humidity.  Certainly the federal fair housing laws still apply, even if we do not see much additional municipal and county fair housing regulations.

Idaho’s Supreme Court found in a 2002 case, D & M Country Estates v. Romreill, that Idaho statutes restricting discrimination in zoning laws do not apply to covenants.   The Court found that because the governing documents in question were specific and unambiguous in limiting housing use to two “families,” the Idaho association was acting within its rights to prohibit use of a house by eight unrelated adults in a group home setting.  Unfortunately, in that case, claims based on the Idaho Human Rights Act were not properly before the Court, and so did not factor into the decision.  Indeed, the Human Rights Commission no doubt would urge Idaho courts to follow the Florida ruling that recorded “published” governing documents indeed can have a discriminatory effect.

In my experience, unenforced clauses in Idaho governing documents have not led to court liability.  However, I have seen such unenforced clauses lead to discrimination charges against associations and their boards.  Even unsuccessful fair housing claims require legal representation and defense.  Rather than face that uncertainty and expense, a preemptive review and amendment of governing documents is still as good an idea here in Idaho as in Florida.  But it may not be the only option.

An option that has not been explored here in Idaho is the use of a recorded cover sheet, as is required in California.  This would involve recording a statement that any discriminatory language in the remaining covenants is to be ignored.  The cover sheet would explicitly void any discriminatory covenants.

Either amending covenants to change language or to add a cover sheet would require the same supermajority vote by the owners.  In Idaho, we have no uniform common interest ownership act to make the process any easier than it sounds.  At the moment, either approach would require legal assistance and membership participation.