Hi, everybody,

Charles here,

I have been unloading units due to covid & ppl not paying..-picked up some BTC :)

now I have an SFR and the tenant wants to go for a 1% interest in the property to satisfy the HOA, has anyone ever heard of this type of arrangement before so an HOA will be happy with a renter...

Opinions welcome....

because the hoa nazis say the renter must be on the deed... :)

Thx,

Charles...

I am absolutely not a fan of investing Condos

Place the property into a land trust and there is no way to find out who owns what.

No way.

If this person has any judgments against them, the judgments will attach to your property.

Also, since they will be part owner, you'll have to foreclose to get them out instead of evict (if you can even do that).

And likely more.

If you insist on even considering this, get a good lawyer involved --- who will also likely tell you no.

In Calif? Just sell and go somewhere you are treated better.

Hi,

everybody,

You'd be better off to sell it to him with owner financing.

Or just sell it to someone else who can get a mortgage.

Life's too short to deal with such a Nazi HOA.

I cannot imagine this being a good thing. You want to sell...improve, anything....now you have a partner that can impact your control.

I haven’t heard about deed requirements for occupancy. However, my sister recently bought a townhouse that has strict HOA .. not allow short term rent or maximum 1x quarterly. It’s 1/2 miles from the FL beach. What they do require are applications of occupants .. I guess for filling and to check if a person has no or acceptable record. So she went ahead submitted applications of a few family members.

I haven’t heard about deed requirements for occupancy. However, my sister recently bought a townhouse that has strict HOA .. not allow short term rent or maximum 1x quarterly. It’s 1/2 miles from the FL beach. What they do require are applications of occupants .. I guess for filling and to check if a person has no or acceptable record. So she went ahead submitted applications of a few family members.

Charles,

Whew! I was tempted to comsider buying a home with an HOA and you just cured me - THANKS!

If the person is on the deed they are an owner, not a renter.

No way to evict.

If you give him any percentage of the property, he is then a partial owner not a tenant.

That would be a very bad choice for you and an absolutely good deal for them.

By the way, what is your home and property worth. What is 1% of its worth.

If it is worth $200,000 you would be giving away $2,000 to get how much for back rent? And you could not sell unless that person signed and then you would need to give that person their share of the profits.

And who pays for all of the taxes, insurance, upkeep. You and then they profit.

Hmmmmm, sorry to be so blunt but it sounds like a classic case of asking for advice hoping you'll be told to do what you already decided to do only for the purpose of having somebody else to blame when you screw up.

The problem here is that everybody told you not to do what you want to do. A real problem for you. You'll have to blame yourself and nobody likes doing that.

If you want a possible solution, you should first be sure HOA has the legal authority to require resident to have some ownership stake. Have quality attorney check CC&Rs to see if HOA is in compliance. That means you don't decide. Why did you rent it in the first place if you were placing yourself in violation?

Anyway, HOA are known for occasionally over stepping their authority. Next decision is if you are in violation, what can HOA do to enforce it? Will they enforce it? Are there others that are also renting out their place without problems? If you are being singled out, HOA might have liability.

Your least concern is satisfying tenant, tenant doesn't decide when or if or to whom you sell property. Unless of course you want to screw up.

Brilliant idea.

When does your REI book come out ?

Does the HOA's list of rules includes that 1% rule? We have some properties in HOAs and have never heard or read about such a clause to "satisfy" the association.

If you are still determined to this - which is ill advised here is how to do it to protect you. Change the deed to reflect a transfer into your trust.

Create a Land trust that shows that 1% interest, then create a second one dated the next day showing the transfer of that same 1% beneficial interest.

If the HOA - and only the HOA needs the paperwork, show them the assignment of Beneficial interest at 1% to your future PITA. At no point does the tenant get that paperwork.

The next day notarize the change in that assignment. Transfers of the BI do not trigger a change to the deed.

Here in California you can NOT EVICT A CO-OWNER! So if your tenant has a INTEREST BY CONTRACT, like a RENT-TO-OWN or a PERCENTAGE INTEREST, you can not evict. You first have to set a side their ownership, win that case then sue for eviction.

I suspect that OP owns a house in an HOA that doe not permit renting the property out. Every house must be owner occupied. That's why someone wants an ownership percentage so they can rent the house.