Rob Samouce: When renters turn into guests the condo starts looking like a hotel

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Rob Samouce: When renters turn into guests the condo starts looking like a hotel

By Rob Samouce, Special to the Daily News

Sunday, March 5, 2006

Being that Naples is such a booming "resort community," more and more full-time owners in local condominiums are realizing that their buildings are turning into what look and sound like hotels during season. The pool is packed. There is nowhere to park. Loud parties are going on at all hours of the day, and we aren't even at spring break yet.

Many condominium owners and directors are asking how this can be happening when they have stringent lease restrictions in their declarations of condominiums. They may have lease restrictions such as leasing is allowed no more than three times per year for terms of no less than 30 days in order to avoid state hotel/motel regulations. They may even have in place stringent lease approval requirements. However, even with these controls, they notice that some units seem to have new people in them every week or even more often. These frequent "tenants" are the ones having the late parties and filling up the pool and the parking spaces.

The reason this is happening, even in those complexes with strict leasing restrictions, is that these condominium associations have left a hole wide open in their declarations of condominium. The hole these unregistered tenants are walking right through is that there are no guest restrictions (in the absence of the owner) contained in these declarations of condominium.

In these condominiums, the out-of-town "investment owner" merely tells his renters to be sure to say, if anyone asks at the condominium, that they are not renters but are "guests" of the owner. Even if the renter/guest signed a lease with the owner, there may be no real good way for the association to find this out so that it can determine if the owner is leasing too many times per year in violation of the leasing provisions contained in the declaration of condominium.

The out-of-town investment owner is sitting in the cat seat. He is making a small fortune putting numerous daily and weekly renters into his unit. The owner is out of town and not experiencing the headaches that his renters/guests are causing and the owner may not even be paying applicable rental taxes.

If an association in this predicament amends its declaration of condominium to add guest restrictions (such as no more than a few guest visits in the absence of the owner per year for no more than, say, two weeks per visit), then this will shut down the out-of-town upscale slumlord. He may then only be able to cheat a few more times than the permitted lease regulations and not get caught. Adding these kinds of lease restrictions will drastically cut down on his profits as well as the mayhem this out-of-town investor owner has caused on his fellow unit owners. These new guest restrictions should also require written registration of guests so that the association can keep track of how many renters and guest are coming in the building to know when an owner has used up all their permitted rental and guest uses of their unit.

At first blush, some owners resist adding reasonable guest restrictions because they are afraid that it could hinder how often their extended family and friends can use their unit in their absence. However, if the amount of guest visits are set at reasonable levels, it is very rare that an owner would go over the limits, and if the guests are legitimate, with proper exception language, legitimate guests would never have to be turned away.

One of the problems that come with living in paradise is that lots of people who can't live here at least want to come and enjoy what's here for short periods. These people, through those who cater to them, will find those condominium complexes that do not have guest restrictions and will take advantage of the situation to the other owner's detriment.

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Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A. concentrates his practice in the areas of community associations including condominium, cooperative and homeowners associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.