We bought a house in foreclosure from bank in subdivision

and rented to tenant . after few days we found out from HOA

that renters will not be allowed in that subdivision from next 6 months,and we have to evict the tenants immediately.

HOA did gave notice to homeowners few years back to not rent

any more.

We forgot to check HOA covenants before buying as we knew it was good renting subdivision.

We are ready to help tenant with moving expenses to find nearby

but he want to go to lawyer.

Tenant has a lease which promises him possession of the house.

LL has a CC&R contract which binds him to to follow HOA rules.

LL will have to resolve the situation. Hopefully, tenant will allow LL to buy out his lease.

If tenant gets a lawyer, there is no way that LL can win.

Get out your checkbook, and try to make an accommodation with the tenant to leave. If you don't, then the HOA can probably foreclose on your house.

I know nothing about Florida or HOAs so this is what I would consider morally correct, not legal.

YOU screwed up. I would pay for their moving expense and perhaps something a little extra for "inconvenience". I would cap the moving expense and I would pay the moving company directly. If they move themselves, I'd figure out a fair dollar amount for their labor of packing up, moving and setting up another new household. I'd get them to sign a release form.

They are living there so free rent isn't appropriate.

If they don't have funds for a new security deposit, I'd use the security deposit I have and pay the new landlord directly. Any damages after move out and you'd either have to eat them or sue the tenant .. again, this problem was due to your lack of due diligence.

Most lawsuits take place (start) because someone cannot

admit to making a mistake, (make it right) and the other party

feels offended / wronged.

" I would pay for their moving expense and perhaps something a little extra for "inconvenience". I would cap the moving expense and I would pay the moving company directly. If they move themselves, I'd figure out a fair dollar amount for their labor of packing up, moving and setting up another new household. I'd get them to sign a release form. "

Tenant DOESN'T HAVE TO MOVE. He has a lease. But LL is not permitted to have him as renter. So it is not LL's choice about how much to pay to tenant or a matter of "getting" tenant to do something. LL cannot evict, but neither can he tolerate tenant to stay. LANDLORD MUST NEGOTIATE, and he is not in a position of strength. He must PERSUADE tenant to leave, and he will have to pay tenants' price. Better to do it BEFORE tenant gets a lawyer, rather than afterwards.

If LL were to get an exception from HOA, then any other owner can sue HOA for failing to enforce CC&Rs.

CC&Rs are "equitable servitudes" that must be complied with. HOA does not have right to grant "an exception". Any other owner (especially one that was also forbidden to rent) can force HOA to use right of foreclosure to to enforce CC&Rs.

Negotiating with HOA is not likely to be a fruitful way of dealing with this problem.

A lawyer is not going to be able to do anything for LL. If owner geta a lawyer, then tenant will too, and that won't help landlord one bit. Get out your checkbook before the lawyers get there. They will just make it worse, and LL will have to pay both of them (actually all three of them: landlord's lawyer, tenant's lawyer and HOA's lawyer) to boot. Get the checkbook and negotiate to buy tenant out before this thing spirals into an even worse problem.

You really need some creative thinking here. HOA is most likely not going to budge. First check HOA docs and confirm that it is against rules to rent the home. Are there any exceptions or time limits?

Can you work with tenant to enter a contract to buy the home, making them the "owner" for a year and then buy it back? Get the Quit Claim Deed back to you and hold it? Not an ideal solution, but perhaps you can get around the HOA this way. You are the bank, not the landlord.

Actually, if HOA were to fail to enforce CC&Rs, then I see at least FOUR lawyer to be paid (by LL): LL's own lawyer; tenant's lawyer; HOA's lawyer; and lawyers for each other owner that wants to force HOA to enforce CC&Rs. While the lawyers of course always win, LL in this case doesn't have a leg to stand on, so getting a lawyer won't do him any good at all.

Moshe is incorrect in this instance. The lease was an illegal lease - it cannot stand in court. All you need to do is to tell the tenants that the lease was illegally written, that you did so inadvertently, but that the lease is void. They need to leave. It is as simple as that. Legally, there is no lease. It would be no different than if I wrote a lease to rent the White House to someone. I have no legal standing to write such a lease, so if I write one, and somebody signs it, the lease is illegal and void. You don't have to break the lease, because there IS no lease. What you have to do is explain that they are currently squatting, and you need them to leave.

The tenants have just as much of a legal responsibility to ensure that the lease is legal as the landlord, so I don't think that you have any legal responsibility at all to help them.

Now, what is legally your responsibility and what is morally you responsibility are two different things. I think your offer to help the tenant with moving expenses and to find a new place are the right thing to do, and it can end with that. Hopefully, you and your attorney can prevent a drawn out thing, so that the HOA doesn't have to get involved. If they do, it can (and almost always does) get ugly.

from Martin

"The tenants have just as much of a legal responsibility to ensure that the lease is legal as the landlord, so I don't think that you have any legal responsibility at all to help them."

You are never going to get a Judge to agree with the above.

Never hurts to talk to the HOA. Just explain the problem you have and it is not just a simple quick eviction.

At least ask if you can you pay a fee and let it go until the lease expires. All this mess could take about that long anyway with the lawyers involved.

Disagree.

As between Lessor & Lessee, LL had a right to rent out his property. The fact that he is in violation of his responsibility as member of the HOA does not affect the validity of the contract between lessor & lessee. Of course, LL should have secured promise from tenant of compliance with the rules of HOA and governing documents, but the governing documents are usually written to bind HOA member from renting out the property. By his (LL) violating the rules, he is responsible to the HOA for violation and subject to their disciplinary procedure. Tenant did not violate HOA rules.

Additionally, if tenant has to go, then he is blameless in this drama which certainly affects his life, and is entitled to compensation.

P.S., An illegal lease would be one that is in violation of the law. Rules of the HOA have the strength of law regarding its members, are NOT the law.

I HATE HOAs for this reason.

Here's what I'd run past my lawyer. Change the paperwork. Instead of a lease, the tenants stay rent-free for six months but purchase an option to rent for an additional six months. The cost of the option is equal to six months rent. Thus, they're not paying rent for the first six months. Therefore they aren't renters, satisfying the needs of the HOA. They get to stay, satisfying the needs of the renters.

How can the HOA change the rules?

I'm asking out strictly from a point of not knowing.

HOAs are ruled by the owners. We had one here a month or two back. They fought and got the ruke reversed once they involved all the non-owner occupants.

Lisa,

Ask the tenants if they are interested in purchasing the home. If they are, sell the home for whatever you have in it to rid yourself of it.

Otherwise, find out the seller financed laws and what you can do.

Alternatively, contact all the non-owner occupants and get the rule reversed. When the rule was passed, did they take a vote of the owners to make it? If it is a subdivision good for rentals, then my bet is that the owners who don't self occupy didn't vote for some reason.

Also, why do they have to go immediately? If the rule doesn't go into effect until 2018, you have a few months to work it out.

Sounds like you need more info.

My non-lawyerly but thoughtful opinion is:

Maybe it would work IF the tenant agreed.

The tenant is holding all of the cards, here. He already has a lease. To get him out, or to get him to take any action other than paying his rent, he needs to be voluntarily persuaded. Money may be one way to persuade him.

I know this has little to do with your situation but let me tell you about the first co-do I purchased over 30 years ago. There was a bank foreclosure auction scheduled in a few days. I looked up the title records and found a mechanics lien on the title. I purchased that lien for a song (10 cents on the dollar) and as a title holder I was able to buy title insurance prior to the auction.

For the next couple of days I tied to get the HOA to provide me with the CC&R's and they refused saying I had no right since I wasn't the current owner or buyer.

The day of the auction I demanded to see a copy of the CC&R's and showed proof of holder of a lien on title record with the county recorder's office. Again, the HOA wouldn't cooperate with me.

So I won the action. Having title insurance I was willing to pay more than others. I handed my cashier's check to the auctioneer and was given the "papers" showing I was now the new owner.

Seconds later the HOA wanted me to "Sign" that I accept the HOA's CC&R's rules/regulations. I told them that I can't sign anything without reading it and have my lawyer approve. They said either I sign the CC&R's or they will void the sale, for which they had no control. Again they would not give me a copy to review or take to my attorney.

The next week I rented the unit out to tenants. Later I was told, "This complex is only owner occupied"! The prior occupants of my unit were tenants, not owners.

SINCE I HAD NO WAY OF KNOWING THAT THE RULES PROHIBIT TENANTS AS OCCUPANTS I REFUSED TO EVICT MY TENANTS. The HOA called the police several times saying my tenants were parking in other units spaces and making other false claims.

This ended up in court. I refused to budge. I had tried several times to learn the rules as a person of interest and was denied access to the rules. When I even went to another owner, they had been told not to share the CC&R's with anyone for any reason.

Now some 30 years later, I'm the only owner that can rent the unit out to tenants since the HOA denied me access to the rules. Several time the HOA and others played games with me and tried to make my life and my tenants life miserable. Anytime my tenants had guests staying past 12 PM, the HOA claimed I was adding illegal occupants and exceeding the tenancy limits.

One time the HOA told other guests that they could part in my tenants parking spots during the day when they weren't home. I had a ball having cars towed over the years. I gave remotes to the security gate to many tow truck companies and got quick responses.

My my...what a mess.

First, let me say it's okay to screw up occasionally, so ignore any shaming attemps--intended or not. We all mess up. Unfortunately, those mess ups are sometimes COSTLY.

I disagree with Moshe's "the land lord must pay the tenant's price" and also with "the land lord is not in a position of power." In a traditional situation, that might always be true. But...follow me.

The tenant WILL be leaving if they try to dig in their heels and stay. The HOA will boot them. The neighbors will hassle them. Yes, the LL too may suffer fines, but bottom line is no renters means no renters. The LL is not obliged to "buy them out." That is just one strategy that may or may not work. The LL can instead suffer the HOA enforced penalties and/or the HOA may have powers to evict the tenants themselves. Time to get a copy of the rules and become educated on what powers they have against you and your tenants.

Here's what I would do. First, try to throw yourself on the mercy of "the court" (i.e. the HOA). Offer all profits from the lease to the HOA fund as well as a profuse apology. Yes, they can make 1 time exceptions. HOA's bend their rules and/or don't enforce them frequently. Rules are not iron bands that cannot be adjusted. They are starting points for negotiation, like anything we see in courts of law as attorneys argue to get charges and/or sentences plead out or reduced. Judges and prosecutors do it all the time.

If that fails: step 2 is offer the tenants a buyout. I'd say moving expenses plus current month's rent for free, plus full deposit refunded, plus maybe 20% for their trouble. If they refuse, remind them the HOA will be hassling them if they don't agree, and if the HOA has the power to evict, show them the printed page in black and white. The HOA may also fine you, so if a 20% bonus to the resident isn't enough...maybe go 30%, or 40%. Find out how much it'll cost you if the HOA does it vs. come after you for the violation. Go with the less expensive route.

I don't think a lease option will work, although it "might." Lease means renter...not owner.

Time to gather more information. Spending a couple hundred bucks with a local attorney who specializes in HOAs would be worth it. Don't panic until you get served papers. Even then, don't panic. Money tends to make things right, but don't imagine for one second you are obligated to pay whatever price the tenant demands.

Minor goofs like HOA covenant violations are not excuses to turn someone into a millionaire. You did not commit a crime. You did not physically injure or kill someone. You got a little hasty and broke an HOA rule on who can live where, a rule the HOA has already specified will be changing very soon. I think this whole problem goes away for between $3000 - $6000 tops. Not sure b/c I don't know what the rent is....but ultimately people don't get to hold you hostage for millions just because of something like this. Unless you live in California may you do...glad I don't live there!

" A good judge will protect your rights even when you screw up. "

What rights? Are you under the impression that LL has some right to continue to rent despite the CC&Ra?

Note that the HOA CANNOT "boot" the tenants. They are not party to the lease, their power extends only over the member (of the HOA). The power of the HOA over members can be (usually minor) financial fines, more substantial financial penalties for repeated violations, and ultimately foreclosure.

The HOA is almost universally treated in court as the "government" of the shared interest development and the court will defer to their judgment in applying their rules, providing that they do not conflict with the law.

HOAs vary in their integrity of enforcement of their own rules, but any member can force them to strictly apply them by taking the matter to court. The HOA will have no freedom to avoid such action. While they informally can be negotiated with, on a formal level, their hands are tied.

Consulting with an attorney is never a bad idea, but LL needs to stop and consider the effect of bringing a lawyer into the problem, whether it improves the situation or makes it worse..

Moshe, my apologies for any misunderstanding. No, the homeowner doesn't have any rights to violate the HOA rules and rent. But the homeowner does have rights not to be impoverished by a simple slip/lack of due dilligence.

What are the actual losses to the renter? Whatever they might be, they are not limitless. The renter cannot arbitrarily determine, "Well, I have pain and suffering and so you owe me $100 million!" They can SAY they want that much, but a good judge will protect the homeowner from unreasonable demands and determine what is appropriate.

This was made in response to your earlier comments, "He must PERSUADE tenant to leave, and he will have to pay tenants' price."...."The tenant is holding all of the cards, here. I realize you said negotiate, but the tenant's first price is NOT the final price...and may not factor in at all if the HOA has powers to evict on behalf of their residents.

I agree with you that the owner is at fault here, and I agree the tenant is entitled to reasonable compensation, but not unreasonable compensation. The tenant is not holding "all" of the cards and cannot expect to receive whatever price they want. If we stay with the card metaphor, maybe they have a full house, but not a Royal Flush all spades. If the tenants "play" their hand too aggressively and bluff, the judge may call their bluff.

" But the homeowner does have rights not to be impoverished by a simple slip/lack of due dilligence. "

What right is that? Its not a question of failure to perform due diligence. It is LL's failure to keep himself out of trouble. He contracted with the tenant; He has to pay the consequence. He doesn't have a leg to stand on if tenant takes him to court. He can get out of his problem by convincing tenant to leave, maybe paying him. He has to settle, which means that tenant can hold out for whatever he wants, at the risk that LL will say NO and take his chances with the HOA. If it (the matter between LL and tenant) goes to court, well it won't because there is nothing to take to court. Tenant has a lease, landlord can't force tenant to break it, court won't evict tenant because HOA rules don't permit. If LL tries to go into court saying that tenant is asking too much, court will try to mediate but won't order tenant to be given an amount and ordered to leave. So, LL really is at the mercy of the tenant. How much money? Well, an amount can probably be found that tenant will be willing to take that will not impoverish landlord. A few thousand dollars would probably go a long way.

HOA won't have power to evict. HOA can go after its member to force HIM (member) to get rid of tenant, and thats where the money comes in. HOA WILL have power to foreclose on the property because of failure to comply with rules, and thats what makes the buyout of the tenant attractive to LL. LL probably would prefer to pay tenant a few thousand and keep the property.

The moral of the story is, or course, what a stupid act it was to buy into a shared interest development with the intention of renting it out, but without checking the rules of the development. But having done it, LL is responsible, he'll have to make good to anyone injured, but it probably won't have to impoverish him. Cash for keys is such a standard tool in LL's tool bag, that any amateur LL needs to learn it right away.

But to answer you post above, stop and think where a judge would get involved, here? Not for eviction unless tenant stops paying rent, not for pain & suffering because if tenant doesn't leave, he doesn't have P & S, not for HOA suing tenant for eviction, only for HOA enforcing their power to foreclose, which judge cannot and won't deny. Nowhere here is the judge dealt a hand which would allow him to ameliorate LL's responsibility.

I have only skimmed through this thread, but I note that everyone seems to be assuming that the CCRs on Lisa's complex forbid rentals. Lisa's semi-coherent original post did not say so.

"after few days we found out from HOA that renters will not be allowed in that subdivision from next 6 months,and we have to evict the tenants immediately. HOA did gave notice to homeowners few years back to not rent any more."

I surmise that the "no rental" provision might be a rule, not a CCR. I do not pretend to understand the "from next 6 months" language, but the "notice ... to not rent any more" suggests to me that it might be a "new" rule.

If this is a rule, the next question would be if the rule was properly adopted and promulgated. Maybe Lisa is not bound by a rule (as opposed to a CCR) about rentals.

This is one of those thread that everyone will argue about for days and Lisa will never return to to read anyhow. ;)

- John...

lisa,

Get more FACTS. Get the HOA rules in writing. Talk to the HOA president and work something out. I hear HOAs making rules like this because they fear absentee landlords not caring for the property. Maybe set up a 90 day reivew - "Is everything running smoothly?"

Talk to the res. Maybe they are willing to move - BEFORE you offer any Cash For Keys. Life for them will be miserable with HOA neighbors glaring at them.

If you Do make arrangements with the res, get their consent in writing that they agree and will not pursue the issue after accepting the deal. Include a "Waiver of Counsel - signing voluntarily, understanding the agreement, and choosing not to use legal counsel."

Life is short and arguing with an HOA is impossible. Don't even bother. Owners will be militant and rise up to outnumber you. HOAs are very emotional and a LL is not on the good side of that emotion. Not worth the stress and energy.

If you bought it as a foreclosure I hope the price was right. Sell it, to the current res with a verbal promise to buy it back or with seller financing to make them "owners".

A land contract or contract for deed MIGHT let the HOA consider them owners.

Or sell it for a small profit or break even.

Let us know what happens.