While the goal of most homeowner association developers is to provide equal access to amenities, that isn't always the case due to land considerations. Some association owned amenities like storage and parking may be available in limited quantities, not one space for every owner. This limitation can be a source of conflict if not handled pro-actively.
An HOA board should enact a resolution for sharing these limited assets while maximizing rental income for the association. This means the board should not allow exclusive use of a limited amenity without payment of rent to the association.
If the association is fortunate enough to have income generating property, the Board should rent it out based on local storage and parking rates. Renting below market rate may fill the spaces but loses valuable income that could reduce monthly assessments for everyone. This is particularly critical when demand is high, a situation where the association can justify charging market rates because of the convenient location.
While rental terms can be month to month, the relatively small rent and greater likelihood of vacancies makes it more practical to require a one year lease. This is particularly true of RV parking where renters would only pay part of the year if they could, leaving an unpaid vacancy while they travel. Renting a year at a time ensures a steady income stream for the association. And if the monthly rent is small, it's wise to collect for the full year to reduce monthly bookkeeping tasks.
When supply exceeds demand, some owners may be allowed to rent more than one space. However, when demand exceeds supply, the Board has the right to terminate the multiple space renters on their anniversary date to allow other owners to rent. Reapportioning limited amenities when demand exceeds supply is only fair. No owner should have a greater right than another.
Finally, under most circumstances, association amenities should not be rented to non-owners. If an owner defaults on the rent payment or causes damage, money can be recouped by liening the owner's association property if necessary. The association has no such rights with non-owners.
Slicing the amenity pie can be problematic when demand is high. Rather than waiting for the kids to fight over the last piece, draft a resolution outlining the procedure, circulate it to the owners for review, revise as needed, formally adopt it at a board meeting and distribute it to all owners.
For more information on this subject, see www.Regenesis.net.
Published: September 19, 2001
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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues.Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at . |