Why should we care about rental activity?
Rental activity negatively impacts property values. Non-owners don’t have an economic interest in the community and, as such, rental properties generally suffer from lower curb appeal and higher amounts of covenant violation. Excessive rental activity also creates safety and security concerns, drastically increases association insurance premiums, and can even prevent potential buyers form obtaining mortgage financing for homes in the community.
Can’t the Board just monitor rental activity itself?
Identifying rental activity is tough, and most boards don’t have the time or resources necessary to do the job properly. Rental activity isn’t something that can be seen from the street, and owners that rent without permission work hard to hide their rental activity from the board. Our program uses subject-matter experts, industry-leading technology and dedicated resources to ensure that your community’s rental activity is monitored in a consistent and effective manner, year after year.
How does the program work?
The program is designed to provide boards with everything they need to properly monitor and administer their community’s rental activity. We use a series of occupancy audits to identify non-owners living in the community, and a standardized set of processes to maintain the data throughout the year. We provide the board with regular reports detailing the community’s rental activity and we help address any rental issues that arise.
How do homeowners generally respond to the program?
The vast majority of owners are generally pleased that the Board is taking proactive steps to monitor and control rental activity within the community. Owners that are renting out their homes (particularly those that get caught doing so without the association’s approval) typically aren’t quite as thrilled.
How much does the program cost? Is it really FREE for most associations?
Associations with specific assessment authority can pass the cost of the service onto owner-landlords, meaning that the program is FREE to the association itself. Owners who are renting out their units with the association’s approval pay $199 per year, and owners who are renting out their units without the association’s approval pay $299 per year.
Most boards have (or can easily obtain) specific assessment authority. We offer volume-based discounts to the few associations that don’t, so please contact us if you’d like to discuss that option in more detail.
How can associations make owner-landlords pay for the service?
Associations with specific assessment authority can make owners pay for common expenses that are occasioned by the conduct of those owners. Because the common expense in this case (the purchase of rental monitoring services) is being necessitated by the conduct of owner-landlords (renting out their homes), boards with appropriate authority can specifically assess owner-landlords for the cost of the service.
Do we have the necessary specific assessment authority?
As part of our service, we’ll review your association’s governing legal documents to determine if you have (or can easily obtain) the authority to pass the cost of the service onto owner-landlords. If you don’t, we can discuss implementing a volume-based discount.
What if an owner thinks there’s been a mistake, or simply refuses pay?
We recognize that these are your neighbors and, as such, we’ll identify and resolve issues as quickly (and amicably) as possible. We’ll work directly with owners to address any discrepancies that arise, and we’ll be quick to credit their account if there’s any possibility of a mistake.
What does a Board need to do to enroll in the program?
To enroll in the program, the Board needs to sign two documents: a contract addendum (which adds the rental monitoring services into the existing management agreement) and a board resolution (which requires owners to provide certain rental-related information).
Where can the Board get the enrollment paperwork?
We will provide the Board with everything needed to enroll in the program.
Is a homeowner vote required to enroll in the program?
A homeowner vote is not required to enroll in the program. All that’s required is a Board vote.
Is a legal opinion required to enroll in the program?
A legal opinion is not required to enroll in the program, but associations are of course free to obtain one.
How long does the occupancy audit take, and what are the steps in the process?
Our multi-step, occupancy audit process takes around 45 days to complete. We’ll start by collecting and cataloging known rental documents, reviewing owner records for signs of rental activity, and searching rental websites for active listings. We’ll then conduct a survey of the association’s membership and follow up (individually) with any accounts that require additional investigation. At the end of the audit we’ll provide the board with a detailed report of our findings.
Is there anything the board can do to help with the audit?
Yes. The board can provide a list of known and suspected renters within the community (no matter how remote the suspicion). We’ll handle everything else.
Will the board get a chance to review the audit results before owners are billed?
Absolutely. Our standard procedure is to review a preliminary audit report with the board prior to the issuance of any billing statements.
How often will you conduct occupancy audits?
We’ll conduct a full, community-wide occupancy audit at least once a year. We’ll also conduct quarterly reconciliations to ensure that closing data is being properly accounted for and owners suspected of rental activity are being properly monitored.
What happens after the occupancy audit is complete?
After the initial audit, we’ll help process rental applications, maintain the rental waitlist (if applicable), continuously monitor community rental activity, reconcile rental and closing data, and provide the Board with detailed monthly reports outlining the rental activity in the community.
What can we do about the unauthorized rentals we discover?
If an owner is renting their home in violation of the community’s rules, then the association can utilize its normal covenant enforcement process (which may include imposing fines and restricting amenity access) to compel the owner to discontinue the unauthorized rental activity.
What is Rental Monitoring Solutions?
Rental Monitoring Solutions is the provider of the industry-leading technology and resources we use to ensure that our best-in-class service is provided in an efficient and cost-effective manner.
What if our association wants to withdraw from the program?
Associations can withdraw from the program at any time without penalty.