Most of my clients would like to believe they are good at managing their rental properties. They complete a background check, have the tenant sign a good lease and they fix issues that come up with the property. However, despite this, they still get HOA complaints about issues that happen on the property. Many owners mistakenly complain that it is out of their control and that the homeowner’s association should pursue the tenant. Unfortunately, this is not the case – the HOA has a contract with the owner, and has no privity with the tenant. Therefore, if there is a problem on property, they are going to pursue the owner. An owner must be proactive when it comes to such issues or the fines will quickly start causing the owner problems.

People do not realize that when they buy a rental home in an HOA they are entering into two contracts – a lease contract with the tenant controlling how the tenant can behave on property, and a separate CC&R contract with the HOA about how that tenant can act. The latter contract controls what happens on property, but often times the owner is not on property. This puts the owner in a difficult position. If the owner gets a violation from the HOA and the tenant denies causing the problem, what is an owner to do?

Unfortunately, the owner has to be prepared to fight the issue on both sides, until she can determine who is correct. As soon as the owner gets a violation notice, she should confirm with the HOA that it was for their property, and then send the tenant a 10-day notice of noncompliance. If the tenant simply apologizes and corrects the issue, the matter is resolved. However, if the tenant denies it was them, the owner is stuck between a rock and a hard place. They should immediately contact the HOA to request proof supporting the HOA’s claims. Depending upon what evidence the HOA has, will depend upon who the owner gets stuck fighting.

Remember, by law, the HOA will only talk to the owner or the owner’s assigned agent.

Therefore, they will not talk to the tenant about the disputes, unless the tenant is designated as the agent (this is a bad idea). Therefore, if a landlord is renting out a property in an HOA, she needs to designate her property manager as the agent for the HOA or she should be prepared to get very involved in the actions on the HOA. As many landlords have found, HOA’s can be very aggressive in seeking to enforce rules against tenants. Even if the tenant admits that they caused the violation, the owner must make sure that the HOA isn’t assessing excessive fines. Pursuant to Arizona case law, enforcement by an HOA must be reasonable. See Tierra Ranchos Homeowners Ass’n v. Kitchukov, 165 P.3d 173, ¶ 15, 165 P.3d 173, 177 (App.2007). This is a subjective standard and will mean different things in different factual circumstances. Therefore, an owner must be very active in managing their homes in an HOA.

by Mark B. Zinman, Attorney
Williams, Zinman & Parham P.C. (Zona Law Group)