Archives October 2018

My homeowner association is trying to take away my property rights!  They say I can’t rent my home to a tenant.  They can’t do that! 

I’ve lost track of how many times I’ve heard those words from upset owners of condos and townhouses. Most Americans firmly believe they should be able to do whatever they want with their real estate, as long as no laws are broken.  After all, isn’t the ability to lease one of the basic rights of property ownership?

Normally, yes.  But owning a home in an HOA community is different.  When someone buys a condo or townhouse, their property is subject to the recorded Covenants, Conditions, and Restrictions (CC&Rs) of the homeowners association.  An essential element of the HOA lifestyle is that individuals must sometimes subordinate their wishes to the community’s best interests.

This is the most overlooked and misunderstood aspect of living in an HOA community. The majority decides what is best for the association and those decisions are binding on everyone.  Those with the power to set policies can also change them at any time (with a few exceptions). 

So when changes happen, it’s rarely accurate to say that a property right has been taken away from owners.  Instead, owners gave up certain rights for the HOA’s benefit at the time of purchase.  That’s why if the majority votes to limit leasing, those who disagree must still comply.

Must Read: Why You Don’t Own Your Front Yard

Human nature is partly responsible for the renting issue being so contentious.  Nothing speaks to us as loudly as our own self-interest.  Owners feel they should be able to lease their units whenever and however they want.  But deep down, those same people are not as steadfast about the neighbors’ right to do so.  What if the other owner(s) chooses tenants that break the HOA rules or cause property damage?  What if so many people decide to lease that the development begins to look and feel like a rental community?  Won’t that hurt the area’s ambiance and property values?

It’s easy to feel sympathy for owners who need to rent their condo or townhouse, but can’t.  This is especially true when the rental restrictions were passed after that particular owner bought. That feels unfair, like changing the rules of a game while it’s being played.  But it’s legal, as long as the lease limitation was adopted properly and there is no conflicting state law.

However, being legal doesn’t necessarily make leasing restrictions a good idea.  People’s lives change and that sometimes requires moving.  Losing a job, changes in marital status or medical issues can all create the need to sell one’s current home.  Unfortunately, the real estate market for the past few years has been a seller’s nightmare.

Lease restrictions work best in hot real estate markets because they prevent too many investors in HOA communities that want to remain mostly owner-occupied.  But in a bad market, these restrictions can harm owners and the neighborhood.  When owners can’t sell quickly and can’t have a tenant, the financial and emotional strain of an unwanted property leads to short sales, foreclosures, and abandoned real estate.  All of these outcomes drive down property values, the very thing rental restrictions are meant to preserve!  In these circumstances, HOA Boards would be wise to liberally grant hardship exceptions to the rental ban.

Most Minneapolis homeowners are shocked to learn they don’t own all of their front yards.

 People assume that the public sidewalk abuts the residential property line.  That’s a logical assumption and one that holds true in St. Paul.  So why isn’t it true in Minneapolis? 

As each neighborhood of Minneapolis was first built, developers dedicated part of their land to public right-of-ways by recording a deed or a plat map.  The location and size of those public easements were dictated by the city planners.  Early street right-of-ways were required to be 60 feet wide in residential areas.  Today, the typical width is 66 feet and the area is usually laid out like this:

For some reason, Minneapolis sidewalks have not been placed along the residential property lines.  Instead, the sidewalk edge closest to the house is usually 2-3 feet away from the property line.  This 2-3 foot wide strip looks like the rest of the privately-owned front yard, but it’s subject to a public easement.  And there are some areas where that public strip is 8-13 feet wide!

I couldn’t find a written explanation about why Minneapolis set the sidewalk away from the property line.  But here are some theories, based upon who might have made the decision.

Must Read: HOA Rental Restrictions – Owner Perspectives.

If a city engineer made the decision, it would have been based on cost efficiencies.  When the “extra” strip is placed next to the property line, the right-of-way construction path is narrower and therefore, cheaper.  A narrower swath requires less grading and fill, and affects fewer trees, fences and retaining walls.

If a city attorney made the decision, real estate law was the decisive factor. Because municipal workers would eventually need to repair the sidewalk, the attorney’s advice was to keep some public property on both sides.  Otherwise, workers would have to obtain permission to trespass from each adjacent owner whenever they needed to work in that area.

If politicians made the decision, it would have been aimed at currying political favor from voters.  The elected officials could have claimed they gave home owners a larger front yard for free (even though a public easement was on part of it).

It’s also possible that traditional construction plans dictated the design simply because no one revised them when circumstances changed.  The pavement, boulevard, and sidewalk fully used the original 60-foot wide street right-of-way.  When a 66-foot width later became the new standard, the older and narrower layout may have continued by default, leaving the “extra” 3-foot wide strip next to the property line.

Regardless of why this occurred, take note.  If you are a Minneapolis homeowner, city workers will mow the grass between the sidewalk and your lot line since it’s public land.  Nah, just kidding.  There has long been a municipal ordinance requiring the adjacent property owner to maintain the area between the property line and the curb.