Condo Renters: A Potential Asset

Question: We have been renting a condominium unit in a fairly large complex for the last several years, and our current plans are to stay here for several more years. For financial and other personal reasons, we do not want to buy. However, quite frankly we feel that we are second class citizens in this condominium complex. We recognize that we cannot serve on the Board of Directors. However, we want to get involved in various condominium activities, including the budget, grounds and maintenance, and a newsletter, but the Board is adamant against our involvement. We believe we can be more productive for the condominium than many of the owners, but we are treated as if we do not exist. Is there any legal reason why we cannot get involved?

Answer: This is a very touchy and sensitive issue in the condominium community. Many condominium boards of directors have the attitude that owners are good and tenants are bad.

But people are people.

I have known many owners who not only do not cooperate with their Association, but indeed are downright destructive. I have known many tenants who take better care of their property than do their counterpart owners.

Unfortunately, there is a stigma attached to a tenant. The general philosophy is that “I bought into this complex, and accordingly I have a greater involvement in protecting my investment.”

However, getting these people to serve on boards of directors, or to participate in the numerous condominium activities is often quite difficult. Apathy is rampant in most condominium associations. There have been many occasions where boards of directors have pleaded with owners to attend an Annual Meeting — or at least give a proxy — so that a quorum could be reached.

Many years ago, there were secondary mortgage market restrictions on the number of tenants that could be living in any condominium community. Generally speaking, if the level of tenants reached 30-40% of the entire membership, lenders would be reluctant to make loans on individual condominium units.

While these restrictions still apply for newly constructed or newly converted condominiums, for all practical purposes most condominium associations do not have to worry about these rental restrictions, unless the ratio starts to come close to 50 percent.

Indeed, I believe that even the financial community is beginning to understand that sometimes a tenant can be a better asset to a condominium than an apathetic occupant-owner.

Any legal question involving condominiums requires an evaluation of the “power source.” The highest authority in any jurisdiction is the applicable state condominium law. The condominium laws throughout the country are different, and everyone has to understand the law in which your condominium is located.

The second level of authority is the Declaration, which is recorded among the Land Records in the city or the county where the property is located. This, in effect, is a document that declares that there is a condominium created, and outlines certain important aspects, including a legal description of the complex. In any condominium, there are three components: general common elements, limited common elements, and individual units. The Declaration attempts to define each of these components.

The third power source is the Bylaws of the Condominium. In some states these Bylaws are recorded among the Land Records, and in other states they are not. But whether or not they are recorded, the Bylaws spell out the basic operating guidelines under which the Association is to function. Bylaws always provide the requirements for the Board of Directors, and will spell out who can serve on the Board. Here is where the legal authority can be found as to whether or not you can serve on the Board if you are not an owner.

The Bylaws will also establish the types of committees that are to function in the Condominium Association. For example, one important committee is the architectural control committee. This committee determines whether a unit owner can make improvements or alterations to the exterior of their unit.

This architectural control committee serves an important function in a condominium. Often, however, it becomes a bottleneck to legitimate and needed improvements within the complex. Indeed, the architectural control committee of many associations has been referred to as the “local KGB.”

Here is a suggestion. If the Bylaws do not require owners to serve on the architectural control committee, this might be a very good place for you to get involved. Because you are not an owner, you do not have any vested interests, nor do you have any ax to grind. The architectural control committee members should be objective and impartial, and it sounds to me as if you meet these tests.

Additionally, if you have any writing skills, you may be able to assist (or edit) the community association newsletter. Or if you have any accounting background, you should be able to serve on the finance committee.

Ask for a meeting with your Board of Directors. Convince them that you are sincere, and truly want to participate in the affairs of the Association. Directors should be able to tap all the resources within the community — whether they are owners or tenants.

I cannot promise instant success, but a competent Board of Directors should be willing to jump at this opportunity to get able and interested volunteers.