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Should you buy a condo or townhouse for an investment?


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4/3/2015
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I have long taken the view that buying property regulated by a homeowners' association is a house of cards and one of the quickest ways to be separated from your investment dollars. This new case, Watts v. Oak Shores Cmty. Ass’n out of California reinforces the notion that as an owner of real estate governed by a homeowners' association you are just one voice of many and have but one vote to decide how your property may be used. Like this California case, there are cases in Florida where investors bought multiple condo’s as rental units, only to have the investment thesis blow up when the other owners then decided no one in the complex would be allowed to rent. As the squib below states: “Homeowners associations may adopt reasonable rules and impose fees on its members relating to short term rentals of condominium units.”

So remember, if you buy into a homeowners’ association you are not really the King of your Castle.

Watts v. Oak Shores Cmty. Ass'n

Court: California Court of Appeal Docket: B240337

Opinion Date: March 24, 2015

Areas of Law: Real Estate & Property Law, Zoning, Planning & Land Use

Oak Shores is a 660-unit single-family residential common interest development, governed by the Oak Shores Community Association (Association). Only 125 to 150, of the homes are occupied by full-time residents. Approximately 66 absentee homeowners rent their homes to short-term vacation renters. Absentee owners sued, challenging: a rule stating the minimum rental period is seven days; an annual fee of $325 imposed on owners who rent their homes; a rule limiting the number of automobiles, boats and other watercraft that 3 renters are allowed to bring into Oak Shores; a mandatory garbage collection fee; boat and watercraft fees; building permit fees; and property transfer fees. The trial court upheld the rules and fee and awarded the association statutory attorney fees and costs. Except for clarifying the award of fees, the court of appeal affirmed. Homeowners associations may adopt reasonable rules and impose fees on its members relating to short term rentals of condominium units.

http://j.st/4d4U



Category: Property & Real Estate Injuries


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