There is a common problem in the landlord-tenant business where the tenant violates the HOA covenants and restrictions (hereinafter “rules”) but is complying with the lease. What is even more notable problem is when the rules and lease provisions contradict each other. The problem becomes worse where the HOA is aggressive about enforcing the rules. Since this problem is inevitable, there are some valuable key points to keep in mind with each lease subject to HOA rules.
First, as a practical matter, know which houses are subject to HOA rules. This takes extra work, but is very helpful for the property manager to provide good services. Once the property manager determines which houses are subject to HOA rules, he should request a copy of the rules from the HOA, which they will likely and gladly give you a copy. If they do not, most HOA rules are (should be) recorded in public records. Look at your county clerk or property appraiser’s website to see if you can download a copy.
Once the property manager acquires a copy, keep one on file so when a potential tenant wants to sign a lease, he can provide a copy of the rules to review before signing the lease. Once the tenant reads the HOA rules, he should sign an acknowledge verifying that the property manager provided a copy and the tenant understands and will abide by them. Or, the property could attach a copy of the rules to the lease with an addendum stating that the tenant agrees to follow all of the rules (updates, amendments, etc.).
In any event, the property managers attorney should consider drafting a lease provision that anticipates conflicts between the HOA rules and the lease. For example:
Homeowner Associations. Tenant shall follow any and all Homeowners Association Rules, By-Laws and Regulations (if any) with regard to the use and maintenance of the premises, and is responsible to acquire any and all applicable rules and regulations regarding the premises. Tenant is not responsible for any normal or special fees or dues assessed by any Homeowner’s Association unless the Tenant’s conduct, actions or use of the premises caused the assessment of said fees or dues. If there is a conflict between the terms of this lease and the rules, by-laws and regulations of the applicable homeowners and/or condominium association rules, the rules, by-laws and regulations of such association shall prevail and the Tenant hereby waives any claim or right to rescind or revoke this lease because of such conflicts or any reliance the Tenant may have made on the terms of this lease or statements made by any party to the lease.
Keep in mind, such a provision could be contested in court. For example, the tenant could that the tenant would not have entered into the lease were it not for the promise made in the lease to do “X” and consequently, the tenant suffered damages by relying on the promise of “X”. It is, therefore, very important that the property manager cover this issue sufficiently with the tenant in the contract and addenda if needed.
Property managers should have a landlord-tenant attorney on their team to provide the best services possible for the property owners, and the HOA-versus-lease issue demonstrates plainly the reason.