HOA rental caps may be revisited in light of current market

Q: I have been trying to sell my condominium for some time now. Finally, I have a party that would like to lease with an option to buy with a nice down payment and would secure a mortgage in two years. My association says that it would not be allowed because it would be over the 25 percent rental cap. My association says that I would have to wait and be placed on a waiting list. Does the 25 percent rental cap apply since I would be selling my unit on a lease option?

A: Yes, the rental cap would apply. A lease option is just that, a lease agreement that allows a tenant to purchase your home. There is no guarantee that the tenant will in fact purchase the home.

Associations may have to revisit their rental caps in light of the fact that for many homeowners, the renting of their home may help prevent a foreclosure and a loss of their home to the banks.

There could even be some legal issues where an owner sues the association for interfering with his or her constitutional right to sell his unit, especially in these economic times with the surplus of homes on the market.

The "bundle of rights" of private property is protected under the Fifth Amendment to the Constitution.

An alternative course of action for associations to consider would be to allow lease/options (the association board would have the right to obtain copies of the agreements) that contain a time for the home to be purchased.

As a condition for allowing the lease/options, both parties to the contract would agree that if the time period for the purchase has been reached and the home has not been sold that the lessee would vacate the home within 30 days (as an example) unless the rentals within the association were under the 25 percent rental cap.

In agreeing to this condition, the association could draft a document for both parties to sign which would then be recorded against the home.

This recordation would allow the association to take appropriate legal action if the parties were to default on their agreement with the association.

Q: The problem that we have is that last week a large light pole was installed immediately behind our house. Our backyard backs up to an area that the builder was only able to describe as a "paseo."

It is clearly some sort of drainage ditch. We were never informed of any plans for this light to be installed behind our house. Our concern is that the light is so close to our back wall that we expect our entire yard to be as bright as a baseball stadium at night.

That makes our $40,000 investment that we spent on our pool with special lighting/flame features as well as landscaping, totally useless.

In addition, our master bedroom faces the light. We have called our master association and our association and they claim that they did not have anything to do with the installation of the light.

We called the developer and were told that there is nothing they can do. The developer did state that in the future this area will be part of the master and subassociations' responsibilities. What recourse do we have?

A: The best recommendation is to contact the city of Henderson's building department and ask them for assistance. First, they should be able to tell you who has taken permits to develop the drainage channel and the installation of the light. Find out what steps you can take with Henderson's City Council. Also, it would be recommended that you make an appointment with the developer and talk face-to-face about this issue and see if they are willing to make modifications.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759. Questions may be shortened and are subject to editing.