Being
born and raised in
Europe, I have a really hard time understanding how a country
that claims to be “The
Land of the Free” can allow neighbors to decide who lives
in – or visits – an owner’s home or condo. But, as the
saying goes: “Other
countries, other customs!”
For
me there is still the question if “screening” is really an
effective tool to avoid having nasty neighbors.
Screening
by:
CREDIT SCORE? Most likely the most unreliable method of all used
to detect future owners who will not pay the association dues.
Don’t forget the system this credit score is many times based
upon: The higher the score, the higher the already existing
debt?
FAMILY? We discussed this screening method last week. A marriage
certificate doesn’t guarantee a functioning family – see the
high number of divorces.
AGE? There are a lot of older folks out there who still
haven’t learned to behave in a civilized manner – or have
turned into kids again.
RACE/RELIGION? Using this method is the safest way to get you
involved in a very costly lawsuit!
From
the many ugly stories I have heard in the past years it seems to
me pretty obvious that SALE
/ LEASE APPROVAL has turned into a money-making business
– abused to raise extra funds – often for the benefit of the
management companies.
Here
is an example I ran into last week. The management company of a
condo association in Miami distributed this list of fees for
sale/lease approval – on their letterhead, demanding that
checks for most of these fees must be made payable to the
management company:
-
A
$100
non-refundable application processing fee.
-
A
$125 (SALE
ONLY) non-refundable estoppel preparation fee; second
requests for $ 75.
-
A
$100 (SALE
ONLY) non-fundable Condo/PUD questionnaire and Lender
Disclosure/Certification Preparation fee.
-
A
$50
non-refundable screening fee per applicant.
Great
money-maker, but does it really serve a purpose other than
creating fees? Does it guarantee that the owners/renters
approved will be to the liking of the future neighbors? In my
opinion the answer is a resounding NO!
I
still get a laugh when I remember the story from a HOA in
Palm Beach
County, where the board charged a $100 fee for each
application. “What’s
wrong with that” you will say?
Actually,
there was a not-so-nice pattern behind these charges by the
board. The board on purpose rejected the first three or four
applications, so the owner was in the end out of $400 - $500
before being able to rent out his/her home. Owners contacted
other owners who rented out homes in that community – and once
the pattern was discovered a recall of the board was on the way.
Let
me make a suggestion for all the board members out there: IF
(a big IF) your
governing documents allow screening and approval or disapproval
of potential buyers or renters, create reasonable
written guidelines for approval and disapproval for
everybody to see – and follow them exactly. Otherwise you
might quickly find yourself on the receiving end of a very
costly lawsuit. Many associations found out really fast that
telling potential new neighbors that they are not “approved” is a real hot potato – and can cost the association
lots of money.
Written
guidelines may help to protect you and the association to limit
financial damages caused by board members/managers who used a
“gut-feeling” to
come up with the decision to disapprove somebody who wanted to
move into the community.
