Helpful information for those who have investment properties: CLARIFICATIONS FROM FHA OF ITS POSITION ON LEASING RESTRICTIONS IN FLORIDA CONDOS

Allowable Leasing Restrictions

The association can

• Restrict total number of units that can be rented at any given time
• Restrict the total percentage of units that may be leased at any given time
• Create a hardship clause for exception to the first two above
• Require that the Board be provided with a copy of the lease
• Require that the lease must be in writing
• Request the names of the tenants
• Require that the lease conforms to the legal governing documents of the association
• Set minimum and maximum lease periods
• Require unit owner to check the Registered Sex Offenders list
• Require rent to be assigned to association if the unit owner is delinquent in the payment of his/her common charges
• Provide corporate leasing restrictions
• Require Board review of lease [May not require approval of lease]
• Require that the lease be on a specific form
  Non-allowable Leasing Restrictions
  The association cannot

• Outright restrict leasing of all units (at least one unit in the condominium must be allowed to be leased) [**See Note below]
• Require that the unit owner own the unit for a period of time prior to being allowed to lease the unit
• Require Board/HOA approval of lease
• Require Board/HOA approval of modifications to, alterations of, amendments to or extensions of lease
• Be granted automatic power of attorney by the unit owner upon purchase of a unit (If the legal documents grant irrevocable POA to the association simply by the unit owner accepting the deed, the condominium is ineligible for FHA condominium project approval.(
• Restrict a unit owner’s ability to lease his/her unit if he/she is delinquent in the payment of common charges
• Require potential tenants to sit with the Board
• Require credit references
• Require criminal background checks (except for Registered Sex Offenders list)
• Require Board/HOA approval of tenant
• Have the power to void leases (leases cannot be voidable by a third party)
• Allow transient leasing
• Allow accommodations typically associated with a hotel, such as maid or front desk service.
  **NOTE: There are two exceptions where an association can outright restrict leasing: age-restricted communities and condominiums where 100% of the units are under Affordable Housing restriction.
  [For information on the background of why certain restrictions are not allowed, you can follow THIS LINK to an article about 24CFR203.41.]  From http://readysetloan.com/fha-clarifies-its-position-on-leasing-restrictions-in-condominiums/ Written by Eric Boucher, The FHA/VA Condo Project Approval Guy (ReadySetLoan Condo Team LLC)