Thursday, February 14, 2008

Expert Advice from our property manager - Steve West

A regular reader asked a question via a comment post on an earlier entry, but I thought the topic was so interesting that I felt it deserved its own post.

Can a condo association require a separate security deposit for renters? My building has six units. In our house rules, it states that only one condo at a time can be rented out. It also states that a security deposit equal to one month's rent must be given to the condo association. Is this legal? I doubt that I am going to get any renter to give me an amount equal to two months rent (one for me, one for the association.) Thanks.

Our resident property management expert, Steve West, from Evolution Real Estate replied:

First let me do the disclaimer - I am not a lawyer and what I'm about to say is based on my years of management experience and not intended as legal advice.

Now to your question: It is my understanding after having asked several lawyers over the years questions very similar to this that the practice of treating Renters (or owners who rent) different from all other owners is illegal. The basic jist is that an association can not create "separate classes of ownership" (ie - one set of rules, regs & fees for resident owners and a different set for investment owners).

However, if you association charges a deposit for ALL owners regardless of status, they might be able to get away with it.

I'd question your board. If they insist, you should suggest to them that before they try to enforce it, they should run it past the association's attorney in order to save themselves some expensive problems.