Market Street at Town Center Condominium

Unit Owner Dialog Regarding Leasing Bylaw Amendment

2012-01-09T17:19:00.003-05:00

In 2010, I proposed a short, simple amendment to our leasing bylaw. I provided the wording of the proposed amendment--and provided my rationale for it--in my post at http://msa-towncenter.blogspot.com/2010_05_30_archive.html

At about the time I made the post cited above, I explained my proposed leasing bylaw amendment to the Board of Directors, including the reasons why I thought my proposal was the right way to go. Since then, I have talked with some unit owners about it, and occasionally left a copy in the Internet Center or the Fitness Center. By posting my proposal, and making copies of it available to other unit owners, I hoped to generate dialog among us unit owners that would eventually lead to consensus among us regarding what--if any--change should be made to our current leasing bylaw. In the post at the above link, you will find the link to view the current leasing bylaw.

To the extent I received feedback about that proposal, it has been positive. I haven't yet been pushing for unit owners to sign it, since my main purpose so far has been simply to generate dialog. But owners of two different units signed it anyway, and gave the signed document to me to hold. And another unit owner told me he had signed it and turned it in to the concierge, without knowing who was pushing it. Several unit owners have told me they like it, and think it is the way to go.

I had thought (mistakenly, it turns out) that our Board of Directors would welcome a grassroots effort to generate a unit-owner consensus on this important leasing issue. But somewhat the opposite appears to be the case, based on a recent encounter I had with the Director who was chosen by our current Board of Directors to be the President of our Unit Owners Association. For more information regarding that recent encounter I had with our current Association President, please see my post at http://mstc-uoa.blogspot.com/2012/01/communication-among-unit-owners.html

If you wish to comment on this or any matter concerning our Market Street at Town Center Condominium Unit Owners Association, I encourage you to join my forum at the below link and post your comments there. Or/and email me at rasmussen305@gmail.com

http://mstcuoa.proboards.com/

47% of Units Leased or For Lease

2011-08-17T17:40:00.000-04:00

At the 11 August 2011 Board of Directors meeting, Property Manager Sue Carr stated that 53% of the 333 Residential Units in our Market Street at Town Center Condominium are owner occupied. Included in this 53% considered owner occupied are all Residential Units not leased or for lease. The remaining 47% are either leased or for lease.

It appears that the need for a leasing bylaw amendment as discussed in previous posts is again increasing.

Number of Units Leased Now Down to 38%

2010-10-31T15:59:00.002-04:00

At the 28 October 2010 Board of Directors meeting, our Association president announced that only 38% of our 333 residential units are leased, according to Federal Housing Administration (FHA) criteria. That is good news!

The current percentage of units leased was looked at carefully as part of an effort to get our Market Street at Town Center Condominium approved for FHA loans. This approval will also be a good thing, because buyers of units in our Condominium will have another financing option available, which should have the effect of making our units more valuable.

I still think it would be good if two thirds of our unit owners would approve the amendment of our bylaws discussed in my post on this blog Sunday, May 30, 2010 (the second post before this one). I say this because economic conditions in the future could again become such that the percentage of units leased could again be pushed high enough that there could again be difficulty for buyers to obtain financing, thereby again tending to push the value of our units downward. Approval of the proposed bylaw amendment would prevent that problem from recurring.

Leasing and Lease Addendum Requirements

2010-06-11T17:51:00.004-04:00

At its 29 April 2010 meeting, our Market Street at Town Center Condominium Unit Owners Association Board of Directors passed Policy Resolution 06-10, which sets out leasing and lease addendum requirements for all leases renewed or entered into on or after 30 April 2010. You can view the required lease addendum and the enacting resolution, respectively, at these two links:

http://www.marketstreetattowncenter.com/docs/LeaseAddendum.pdf

http://www.marketstreetattowncenter.com/docs/LeaseAddendumResolution_06-10.pdf

In a post on this blog in 2007, I had urged Board adoption of some of the elements included in this resolution, and I do support this resolution. (That early post is at http://msa-towncenter.blogspot.com/2007/09/leased-unit.html)

But this action by the Board does NOT, in my opinion, lessen the need to amend our bylaws as discussed in the preceding post on this blog, at http://msa-towncenter.blogspot.com/2010/05/back-to-future.html. This Board resolution will lead to better Association control of rentals, but probably won't do much to reduce the number of units rented. We need to amend the bylaws as that post discusses if we are to significantly reduce the number of units leased or rented. If you wish to comment regarding this or any unit owner association issue, please see the information at the end of the post at the link above in this paragraph.

Back to the Future

2010-05-30T13:19:00.005-04:00

I agree to amending Bylaw Article XI, Section 1, Subparagraph (f) by inserting the following sentence before the sentence that begins with the words "The foregoing provisions of this subparagraph": "Any Residential Unit purchased after 31 December 2012 may not be rented or leased unless the Board of Directors grants a hardship or other reasonable exception."
Unit Owner signature: _______________
Unit Number: ____ Date signed: ________

The above paragraph is the wording of the petition I propose be used to gather signatures of our Market Street at Town Center Condominium Unit Owners. It contains the one sentence (in red) that would be added to the current leasing bylaw (that has so far remained unchanged since our Condominium was formed in October 2004). You can view that current leasing bylaw at http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF on page 52.

This amendment incorporates the approach I recommended in my early posts on this blog, but have now simplified to that one sentence you see in red near the beginning of this post. I am reverting to that approach I originally advocated because it appears to me that our Board of Directors is concerned about the uncertainty of what future Boards of Directors might do with the freedom to lower or raise a limit (on the number of Residential Units rented or leased) as frequently as once every 12 months. I think the one-sentence amendment I am proposing here removes most of that uncertainty.

The reason for the 31 December 2012 date is to alleviate fear that the amendment would remove investors from the pool of potential buyers of Residential Units. That relatively late 31 December 2012 effective date of the rental prohibition theoretically would actually increase the buyer pool for Residential Unit Owners who sell by that date. It would keep the current pool of resident and investor buyers, but might bring in some additional investor buyers wanting to buy a Residential Unit here soon enough that the rental prohibition would never apply to the Residential Unit they would be buying.

For any Residential Unit Owner concerned because they expect to sell after 31 December 2012, I offer these two arguments. First, potential buyers who plan to live in their Residential Unit and lean toward communities that are headed toward a low percentage of renters would theoretically be added to the buyer pool. Second, potential buyers who can get adequate financing to enable their purchase here because of the amendment would be added to the buyer pool. So I don't think it is clear that the buyer pool would be hurt even after 31 December 2012.

With regard to renting or leasing your Residential Unit, for all Residential Unit Owners who currently own, or complete the purchase by 31 December 2012, the amendment adds no renting or leasing limits or restrictions at all. In fact, in the long run, as the percentage of Residential Units rented or leased decreases, the prospects for leasing or renting out your Residential Unit should actually improve as the commodity you are offering for rent or lease becomes scarcer (due to post-31-December-2012 purchasers not allowed to rent or lease their Residential Units).

If someone asks you to sign the petition described in the first paragraph, I hope you will do so. I find it hard to see a reason not to sign it, and I see benefits from signing.

You may want to add your ideas in a post on this blog. (Some of the earliest posts on this blog provide information regarding how to post on this blog.) And/or, you can register on my forum at http://mstcuoa.proboards.com/ and then post comments there. If you post a comment, maybe other of our unit owners will join in the dialog. Also, I welcome email comments at rasmussen305@gmail.com. If you want to sign the petition now, email me and I will get one to you to sign.

New Leasing Bylaw Amendment Proposal

2010-05-13T17:28:00.005-04:00

Our Board of Directors will consider a new leasing bylaw amendment proposal at its meeting 7:30 p.m. Thursday, 27 May 2010.

The current leasing bylaw, which has remained unchanged since establishment of our Market Street at Town Center Condominium in October 2004, is subparagraph (f) on page 52 of our Bylaws (http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF). The proposal is to insert some sentences before the sentence that begins with the words "The foregoing provisions of this subparagraph".

The substance (but not the exact wording) of the proposal handed out at the 29 April Board of Directors meeting was to insert, in essence, the following sentences: The Board of Directors may, from time to time, establish a limit on the total number of Residential Units that may be rented or leased. Once the Board of Directors votes to implement such a limit, the Board of Directors may not change that limit more than once in 12 months. The Board of Directors may grant hardship or other reasonable exceptions to such a limit in accordance with a policy governing such exceptions. Any such limit as the Board of Directors may establish applies only to Residential Units purchased after recordation of this amendment.

I strongly support an amendment like this. It remedies all of the "defects" that I identified in previous posts on this blog as problems with the old (now dead) leasing bylaw amendment proposal at http://www.marketstreetattowncenter.com/docs/BylawsLeasing.pdf.

You may want to add your ideas in a post on this blog. (Some of the earliest posts on this blog provide information regarding how to post on this blog.) And/or, you can register on my forum at http://mstcuoa.proboards.com/index.cgi? and post your comments there. Also, I welcome email at rasmussen305@gmail.com.

Leasing Amendment Agenda Item for Annual Meeting

2009-09-28T00:10:00.003-04:00

During its 24 September 2009 meeting, the Board of Directors of the Unit Owners Association of our Market Street at Town Center Condominium discussed a leasing amendment agenda item for our upcoming 12 November 2009 annual unit owners meeting. This post is my response to that Board discussion.

I’m unenthusiastic about hearing a loan officer or realty agent explain to us unit owners the problems associated with roughly half of our unit owners renting out their units. Being familiar with posts on this blog, I already understand that having so many units rented is a problem; I would rather hear discussion among our unit owners about the issue.

You can view the official Association leasing amendment proposal at http://www.marketstreetattowncenter.com/docs/BylawsLeasing.pdf. I believe that proposal is dead, but a revised leasing amendment--without the defects addressed in posts on this blog--might garner the support of the requisite 2/3 of our unit owners.

Please note two respects in which that (now dead?) Association amendment proposal would have placed new restrictions on current unit owners. First, it would have changed the minimum lease term from 6 months to 12 months. Second, it would have imposed a new requirement that current unit owners obtain permission from the Board before leasing their unit to a new tenant. Thus, it is somewhat incorrect to say that current unit owners would have been grandfathered-in.

If our Board believes amending the leasing bylaw serves the best interests of our current and future unit owners, the Board should first oversee the crafting of a new leasing bylaw amendment--an amendment without the defects explained in posts on this blog. During this amendment-crafting process, the Board should be receptive to inputs from us unit owners, and should incorporate those inputs into the new amendment as much as possible.

When the Board believes it has the best amendment it can get, the Board should unanimously pass a resolution of support for the amendment--a resolution that requests that all unit owners support the amendment. After the Board passes that resolution, the Board should mount a major effort to motivate unit owners to sign the amendment.

Finally, getting enough unit owner signatures on the amendment can continue for as long as it reasonably takes--probably several months, as discussed in the preceding post on this blog. The Board should take an active role in seeking the necessary unit owner signatures during those several months.

You may want to add your ideas in a post on this blog. (Some of the earliest posts on this blog provide information regarding how to post on this blog.) And/or, you can register on my forum at http://mstcuoa.proboards.com/ and then post comments there. If you post a comment, maybe other of our unit owners will join in the dialog. Also, I welcome email comments at rasmussen305@gmail.com.

A New Leasing Bylaw Amendment?

2009-09-15T07:08:00.001-04:00

Our Unit Owners Association Board of Directors has become aware of lender disapprovals of mortgage applications of potential buyers of units within our Market Street at Town Center Condominium. Reportedly, the lenders disapproved the applications because of the growing proportion of non-resident owners within our Association, over 50%. Concerned about these disapprovals, our Board has requested the formation of an ad hoc committee to review the issue and develop recommendations to address the problem.

If you would like to participate on this committee, please contact Sue Carr at 703-435-7912 or email the Board at Marketstreet@hotmail.com.

The above two paragraphs are partly quoted and partly paraphrased from the electronic information board in our mailroom. I first noticed the above information approximately a couple weeks ago, in early September 2009. Maybe the problem is severe enough now that a new ad hoc committee can develop a revised amendment that the requisite 2/3 majority of our Market Street at Town Center Condominium unit owners will approve.

To create the ad hoc committee, our bylaws (at Article IV, Section 4, on page 22 at http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF) require that our Association President, Mr. Taggart, appoint the committee from among the unit owners, subject to the confirmation of the Board of Directors.

Once appointed, the committee must conduct itself in compliance with the Virginia Condominium Act. Paragraph B at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-79.75 pertains. In particular, the ad hoc committee should note that “Notice of the time, date and place of each meeting of the … committee … shall be published where it is reasonably calculated to be available to a majority of the unit owners,” and that “All meetings of the … committee … shall be open to all unit owners of record.”

I hope a new ad hoc committee will consider suggestions in the many posts made in this blog. A good place to start would be http://msa-towncenter.blogspot.com/2008/03/amendment-defects.html.

The ad hoc committee and our Board of Directors should note bylaws Article XIV (“Amendments to Bylaws”) on page 60 at http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF, which states “These Bylaws may be modified or amended as provided in Section 55-79.71 of the Condominium Act.” You can view that referenced Section of the Condominium Act at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-79.71. Paragraph B of that Section is where the two-thirds majority requirement comes from. Paragraph D explains that unit owner agreement to a bylaw amendment shall be evidenced by signing the amendment. I read that to mean that different unit owners may sign the amendment at different times, perhaps mailing in the amendment with their signature on it, or signing it at the concierge’s desk, or signing it when another unit owner knocks on their door and requests they sign. I don’t see why it wouldn’t be okay to hold informational meetings (with no quorum requirement) and encourage unit owners to sign the amendment while they are at the meeting. So long as unit owners who have signed are permitted to withdraw their approval at any time before the Association President certifies that the requisite 2/3 majority of the unit owners signed the amendment, I don’t see why the approval process couldn’t go on in this way for several months if necessary. A question that someone could ask the Association attorney is how long the amendment approval process could reasonably continue.

I am hopeful that our unit owners will this time approve a good leasing bylaw amendment.

I would be delighted to see comments from any Market Street at Town Center Condominium unit owner. You can post on this leasing blog by following the procedures discussed in some of the earliest posts on this blog. Also, I heartily encourage you to join my forum (message board) at http://mstcuoa.proboards.com/ and post a comment or question there. Or, if you prefer, I will be delighted if you email your comments or questions to me at rasmussen305@gmail.com.

Lease Amendment Issues Article

2008-05-03T13:23:00.003-04:00

There is an interesting article in the 3 May 08 Real Estate section of The Washington Post. It considers many of the issues that have arisen in our meetings regarding amending the leasing bylaw of Market Street at Town Center Condomium. You can read the article by clicking on the following link:

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/02/AR2008050201722.html

Lease Amendment Voting Results

2008-04-23T18:15:00.002-04:00

Through 9 April 2008, the date of the special lease amendment unit owners meeting, 44.54% of us unit owners voted on the amendment. The votes in favor of the amendment represented 28.55% of the ownership (with 66.67% needed to pass the amendment). The votes opposed to the amendment represented 15.99% of the ownership (with 33.34% needed to defeat the amendment). The Board of Directors probably won’t end the voting until we unit owners either pass or defeat the amendment.

Why We Are Voting FOR the Leasing Amendment

2008-04-19T14:34:00.004-04:00

Today an article appeared in The Washington Post that tipped the balance for Brenda and me to vote in favor of the leasing amendment on which we Market Street at Town Center Condominium unit owners are currently voting.

You can see the amendment we are voting on by clicking on this link: http://www.marketstreetattowncenter.com/docs/BylawsLeasing.pdf
You can see the newspaper article by clicking on this link: http://www.washingtonpost.com/wp-dyn/content/article/2008/04/18/AR2008041801495.html

That article made clear to me that 30% is the appropriate maximum percentage of rented units we should permit in our building.

We are voting FOR the amendment in spite of the “defects” I have identified in previous posts on this blog. Since we would probably never rent out our unit, and don’t foresee selling our unit even after many years into the future, most of the “defects” wouldn’t directly affect us any time soon. And we do think it is a good thing to get the number of units rented down to the 30% level. (As mentioned in my “Amendment Defects” post of March 1 on this blog, we wish the amendment gave the Board of Directors authority to eventually reduce the number of units rented to significantly less than 30%.)

If the amendment we are currently voting on doesn’t pass, I hope the “defects” I’ve identified (as well as some other problems with the amendment I haven’t addressed on this blog) will be corrected in any revised amendment proposal we unit owners might be asked to vote on in the future.

If you have any comments or questions regarding this or any post on this blog, please post them on my forum at http://mstcuoa.proboards59.com

Flexibility for Boards of Directors

2008-04-15T15:42:00.000-04:00

In the post just before this one, the forth “defect” I identified in the leasing bylaw amendment was the insufficient authority the leasing amendment gives to our Board of Directors. Way back on 17 August 2007, I sent the chairman of the leasing committee an email that began with essentially the following paragraph.

I believe we unit owners should make only the minimum changes to our leasing bylaw as are necessary to give our Board of Directors the authority it needs to fill out the rest of the leasing policy with resolutions and motions. Bylaws are extremely difficult to amend to adapt to possible changed circumstances in the future, but the Board of Directors can easily supersede past resolutions and motions if changed circumstances in the future make that appropriate. I believe that if we unit owners select our Directors wisely, Boards of Directors--both present and future--will do what is in the best long-term interests of us unit owners. (Our bylaws even provide the means to remove and replace Directors before the end of their terms if as few as about 13% of us unit owners want one or more of the Directors replaced.) I believe we shouldn't needlessly tie the hands of present and future Boards of Directors by putting specifics in the bylaws that don't need to be in the bylaws to enable the Board of Directors to do what it needs to do.

I still believe what I said in that paragraph. The leasing amendment now being voted on may pass, in which case this post is mostly irrelevant. But if the necessary two thirds of the unit owners don’t approve it, I hope an amendment along the lines of what I have been pushing since August 2007 (See my early posts on this blog.) can be used as the starting point for a new leasing amendment proposal.

Amendment Defects

2008-03-01T01:05:00.007-05:00

About 26 Feb 08, our Association Manager mailed to us the actual leasing bylaw amendment we unit owners are asked to approve. You can view that proposed amendment at http://www.marketstreetattowncenter.com/docs/BylawsLeasing.pdf In my opinion, it has three specific defects and one general defect. We unit owners must decide if we should vote in favor of it even if we think it has some defects. Here are the defects I see.

First, paragraph (ii) sets the minimum rental period at 12 months. In my post on this blog 3 October 2007 (http://msa-towncenter.blogspot.com/2007/10/12-month-versus-6-month-minimum-rental.html), I provided examples of situations where it would be appropriate for the Board of Directors to have the authority to approve a lease term as short as six months, but this amendment doesn’t provide that authority to the Board.

Second, the second bullet of paragraph (iv) requires that future unit owners NOT convey their “Unit to a person who does not intend to occupy the Unit, unless the number of leased Residential Units is below the thirty percent (30%) cap….” How would the seller of a unit be expected know the buyer’s true intentions? Would our Association seek legal recourse against the seller of the unit if the buyer leases the unit? Won’t this provision discourage potential buyers from buying a unit in our Condominium for fear of legal problems if they should want to sell their unit in the future? Instead of this backwards approach, the amendment should make clear that a unit owner has the right to sell her/his unit to anyone who wants to buy the unit, and that the onus is on the buyer of the unit—not the seller of the unit—to become informed regarding the leasing restrictions of our Condominium, and to comply with those restrictions.

Third, the last sentence of paragraph (v) makes it highly unlikely that the percentage of leased units in our Condominium can ever be reduced much below 30% unless a follow-on amendment is approved in the future. I see nothing in the amendment that gives Boards of Directors any authority to prohibit leases for the purpose of reducing the percentage of leased units to less than 30%. The two posts on this blog immediately preceding this post both addressed this problem.

Forth, and finally, the amendment as a whole seems to give little authority to future Boards of Directors to apply judgments regarding what rental policies might be in the best interests of future unit owners. The amendment seems to try to decide everything for future rentals now, and relegates the Board to some enforcement responsibility, but even tries to put some of that on the seller. I still believe language like I proposed in some of my early posts on this blog is much more consistent with the role our bylaws seem to envision for our Boards of Directors, and would be much more in the best interests of us unit owners. But the choice we unit owners have before us now is whether or not to vote in favor of the amendment that was mailed to us.

30% Lease “Cap”???

2007-12-04T01:00:00.002-05:00

It appears to me that using the term “30% lease cap” in the “Amended Proposal for Leasing Limits” is, at best, misleading, and, perhaps, deceptive.

I acknowledge that the Proposal will eventually get the percentage of leased units down to 30%. The problem is that the Proposal probably isn’t going to permit the percentage of rentals to be reduced to much less than 30%. So 30% isn’t a cap; it’s a percentage of rental units that, once achieved, must then be lived with forever unless the leasing bylaw is again amended.

That makes no sense to me. If we are going to all this effort to amend the leasing bylaw, why would we not give future Boards of Directors the authority to mandate a percentage of rentals less than 30%?

Why wouldn’t 25% rentals, or less, be better than 30%? By what thought process did the creators of this Proposal conclude that it is in the best interests of future unit owners to maintain the rental level at about 30% without another difficult-to-pass bylaw amendment? Or did the creators of this Proposal not realize that one of its results probably would be that the percentage of rentals can’t be kept to a level less than 30%?

Lease Proposal Hopes

2007-11-10T19:05:00.000-05:00

I hope the proposed leasing bylaw amendment that comes back from the Association attorney will make the following points clear.

1. After the number of units leased has been reduced to the 30 % lease cap specified in the bylaw, the Board of Directors will have the authority to specify a percentage less than 30 % for the number of units that may be leased.

2. A unit owner has the right to sell her/his unit to anyone who wants to buy the unit, and the onus is on the buyer of the unit—not the seller of the unit—to become informed regarding the leasing restrictions of our Condominium, and to comply with those restrictions.

Election Day, USA! Amended Lease Proposal Approved by the BOD!

2007-11-09T14:18:00.000-05:00

by Vince

Stop Press!
Election Day, 2007!

As millions of voters from Maine to Malibu trudged to the polls to cast their votes in municipal and state elections, a Bylaw amendment proposal with broad local implications was voted on by the Board of Directors of the tiny municipality of Market Street at Town Center Condominium.

After nine months of hard campaigning to convince a concerned constituency of the need for a lease policy, the BOD passed the amended (second) version of the Lease Policy Subcommittee's proposal to set leasing standards at the Market Street Condominium.

After a lengthy discussion of budgetary issues, the BOD discussed and called for a vote on the amended lease proposal. In attendance were various members of the Subcommittee as well as the leader of the loyal opposition. Nevertheless, the proposal was passed with virtually no commentary from the floor.

When contacted for a statement, subcommittee member and co-architect of the proposal, Joe Licari, said, “Great news! Once the Board sets a meeting date, we need to get everyone involved in turning out a big positive vote. Let's keep working together to make our homes at Market Street the best place to live and invest in Reston Town Center."

The next step for the lease proposal, after a thorough review by the Association's legal counsel, is a period of public review and dialogue, after which approval by two-thirds of the constituency will be required to put the lease proposal on the books as a Bylaw amendment.

The Lease Policy Subcommittee believes that homeowners will agree that this critical proposal represents the best chance for MS homeowners to resolve this longstanding issue.

Stay tuned, folks!

Optimum Percentage of Leased Units?

2007-11-02T23:57:00.000-04:00

What is the optimum percentage of leased units in our Condominium? 30%? 40%? 20%? 10%? 5%? Zero %? If we think 30% leased units is better than 40% leased units, might not 25% leased units be better than 30% leased units?

Do we have a good basis to say that the percentage that would be optimum in 5 years would also be the optimum percentage of leased units in 15 years?

My point is that a bylaw doesn’t seem to me like the right place to specify the percentage of units that can be leased, because bylaws are incredibly hard to change. The right place to specify such a percentage is in a resolution enacted by the Board of Directors. That gives future Boards of Directors the flexibility to do what is best for unit owners under now unforeseen different circumstances in the future.

While I favor amending our leasing bylaw so that it restricts leasing for only those owners who purchase their unit AFTER the leasing bylaw is amended, I strongly believe the bylaw amendment shouldn’t identify a specific permissible percentage of leased units; that should be left up to Boards of Directors. Please read my other postings in this blog for the details regarding my proposal.

New Blog for Non-Leasing UOA Issues

2007-10-28T20:04:00.000-04:00

Since this blog is essentially limited to the leasing bylaw amendment issue, I have started a sister web log (blog) to address unit owner association (UOA) issues other than leasing. To view it, please click on this link:

http://mstc-uoa.blogspot.com/

Also, please add this link to your “Favorites” list so you can check it occasionally to see what is new.

How to Reduce the Percentage of Units Leased

2007-10-28T15:01:00.000-04:00

In this post, I respond to these statements: “I am concerned about how to get us from current lease-levels to target lease-levels….I haven't heard the discussion about how to get us down to target lease-levels….Has anything been proposed?”

It appears to me there are only three theoretical possibilities to reduce current lease levels:

a. Don’t permit owners already leasing their units to continue doing so.

b. Don’t allow current resident owners to start leasing their unit.

c. Don’t allow units purchased in the future to be leased.

Of these three, (a) could never be enacted because we couldn’t get enough votes. Probably (b) couldn’t be enacted either for lack of sufficient votes. That, in my opinion, leaves only (c) available to reduce lease levels. I have written extensively about this issue and have made a specific proposal that I believe is the most realistic of any of the proposals I have heard about. My proposal retains all of the language of the leasing bylaw that has been in effect since our Condominium began in October 2004, but inserts the following additional sentences into that original bylaw:

“Unit Owners whose deeds were not recorded among the land records of Fairfax County before 60 days after the date of recordation of this amendment have no right to lease their unit. However, the Board of Directors is hereby authorized to permit—on a limited case-by-case basis—some members of this class of Unit Owners to lease their unit. The Board of Directors may use whatever criteria it deems appropriate to decide if authorizing a requested rental will be in the best long-term interests of the Condominium Unit Owners in general. Such criteria may include, but are not limited to, hardship the requesting Unit Owner might suffer if leasing of the unit is not permitted, the percentage of units in the Condominium that are already leased, the requested duration of the lease, the estimated probability that the requesting Unit Owner will move into the unit at the end of the lease term, whether the intended lessee is related to the requesting Unit Owner, and the character of the intended lessee. Unit Owners whose deeds were recorded before 60 days after the date of recordation of this amendment do not need Board of Directors authorization to rent their unit, being subject to the terms of this bylaw as it read before this amendment thereto.”

I beg anyone reading this post to click on the below link to read more about my specific proposal. I believe that only an approach like I have proposed has a realistic chance of garnering the two thirds vote required to be enacted. http://msa-towncenter.blogspot.com/2007/10/rationale-for-my-leasing-bylaw.html

With All Due Respect, Paul

2007-10-08T20:10:00.000-04:00

When the time comes to vote on a lease policy at our Condominium Association, it is important that Owners know that there will only be ONE lease policy proposal to consider. That is the amended proposal submitted by the Lease Policy Committee (LPC) to the Board of Directors.

Yes, folks, after seven months, nearly 900 hours of research, meetings and outreach, LPC--which stated up front that it was working on a “living document”--has amended the initial draft proposal. That amended proposal was submitted to the Board of Directors today, 9 October, and, if approved, will be presented to you, the Owners of this building, very shortly.

After the LPC-amended proposal has been approved by the BOD, it will be available for review by Association members. At that time, I will extend a second invitation to Paul305 to work with LPC to help us pass this much-needed change to our Bylaws. After all, the considerable time, energy, research and depth of coverage he has given this topic is a clear indication that he acknowledges a need to “fix” this legacy flaw in our Bylaws.

Let’s end the good-natured division, Paul305, roll up our sleeves and work cooperatively to get this Bylaw on the books. This critical change is for the common good; our collective efforts can make it happen. Then and only then Market Street at Town Center Condominium become the place we all knew it could be.

Vince402, Chair, LPC

Why is restricting the # of renters important?

2007-10-07T21:11:00.001-04:00

http://www.mortgagenewsdaily.com/12132004_Buying_A_Condo_Is_Not_Like_Buying_A_House.asp

excerpt:

"What is the percentage of owner-occupied units in the complex?

This is important for two reasons. First, Fannie Mae and Freddie Mac may not finance the purchase of a condominium in a complex which they view as too heavily owned by non-occupants (investors). The usual benchmark for financing is around 2/3 owner occupied. The wisdom of this was amply demonstrated during the banking crisis of the early 1990s when thousands of condo units were foreclosed in complexes with high investor ownership. While those foreclosures were taking place, condo fees were not being paid so associations had to defer maintenance. Innocent owner occupants found themselves held hostage in units which were deteriorating, losing value, and stigmatized in the eyes of real estate agents and buyers. Condo developments in which Fannie Mae and Freddie Mac had granted mortgages remained relatively stable in the midst of the chaos. Of course, the ability to mortgage a property is important not only when you are a buyer, but also later, when you are trying to sell the unit.

The second reason for asking this question is the difficulty condo associations have in enforcing rules against renters. HOAs are really dependent upon the willingness of owners to discipline their tenants. These owners may or may not have any interest "

I will continue to look for more sources.

Rationale for my “Proposed Leasing Bylaw Amendment”

2007-10-05T16:58:00.001-04:00

I like the idea of reducing the number of rented units in our Condominium—IF it is done in what I view as the right way.

I believe there is consensus among current unit owners that their right to lease their unit shouldn’t be restricted. Two possible reasons current unit owners might feel that way are (a) because of the unfairness of changing the rules in the middle of the game and (b) because favorable votes of two thirds of the current unit owners are needed to change the leasing bylaw to enact even a leasing restriction that applies only to future owners.

Thus, we are left with not generally allowing future unit owners to lease their unit as the only means of reducing the number of leased units in our Condominium. And that is what I think we should do. I will address the cons and pros of this approach in the remaining paragraphs.

I acknowledge it might take years to significantly reduce the number of leased units. How fast we see favorable results depends largely on how many units are sold each year. With each passing year, more and more units will be owned by the new (post-amendment) owners, and thus will be very unlikely to be leased. While the lowering of the number of leased units may be slower than some would like, this approach, in my view, is much better than taking no action at all to reduce the number of leased units.

I believe there is no issue at all regarding unfairness or hardship such a leasing restriction could result in for future owners. Virginia law requires full disclosure of our bylaws and rules and regulations to prospective purchasers of units in our Condominium, so they will be able to make an informed decision regarding whether they want to buy a unit that most likely can’t be leased. It’s a free country, and if they don’t like that restriction, they should perhaps choose to buy a unit in a different condominium—one that doesn’t have a leasing restriction. An investor wanting to buy a condominium unit primarily to lease to tenants would no doubt be turned away from our Condominium by such a leasing restriction.

But consider a different potential buyer of a unit in our Condominium—one who plans to live in the unit for many years, beginning as soon as he/she settles on the unit. If that potential buyer believes what we have been hearing regarding the benefits of living in a Condominium where the units are largely owner-occupied, won’t that leasing restriction make our Condominium more attractive to that potential buyer? And might not that increased attractiveness of our Condominium make that potential buyer more likely to choose our Condominium over a condominium without such a leasing restriction, and/or to make that potential buyer willing to pay more then he/she would have if we didn’t have that leasing restriction?

So, in summary, the amendment I am proposing seemingly has nothing but benefits for current unit owners, and therefore, in my view, ought to be heartily supported by all current unit owners. The only possibly valid argument I can see for not supporting my proposed amendment is that investor buyers wouldn’t be interested in buying a unit that couldn’t be rented without very-hard-to-get approval from the Board of Directors. But I believe that effectively removing non-resident investors from the universe of potential buyers is more than offset by the increased attractiveness of our Condominium to buyers who want to live in our Condominium.

I posted my “Proposed Leasing Bylaw Amendment” on this blog Aug 31. To see it, click on “Aug 31 (2)” under “BLOG ARCHIVE” on the right-side of the page at the beginning of this blog.

12-Month Versus 6-Month Minimum Rental Term

2007-10-03T20:13:00.001-04:00

IF it doesn’t lose us too many votes from current investor (non-resident) unit owners, I am okay with 12 months being the minimum rental period for the normal investor rental where another tenant will move in after a current tenant leaves.

But, I believe a rental period as short as 6 months should continue to be available for the Board of Directors to approve on a case-by-case basis for a rental for which the Board of Directors has a solid basis to believe a unit owner will move into the unit as soon as the shorter-than-12-months lease ends. If we could get a unit owner to move into his/her unit after only 6 months, why in the world would we make the unit owner wait 12 months before he/she moves in, thereby keeping the unit tenant-occupied for 12 more months rather than only 6 more months?

Consider a hypothetical situation where a current resident unit owner is being temporarily sent out of this area by her employer, but wants to live in her unit again as soon as she returns to this area. Assume also that her employer is willing to bring her back here again in either 6 months or 12 months, whichever she prefers. For this situation, how could anyone argue that moving back into her unit in 12 months helps our owner-occupied percentage more than having her move back into her unit after only 6 months? It seems to me the opposite is the case.

Or consider another hypothetical situation, where a current unit owner wants to sell her unit, but is having great difficulty doing so because of a depressed real estate market. Now she has found someone who wants to buy her unit and live in it, but who first needs to rent it from her (the current owner) for either 6 months or 12 months before his (the buyer's) financial situation permits him to complete the purchase. Will someone please tell me how our owner-occupied percentage is improved more by making the purchaser rent the unit for 12 months rather than 6 months before settling the purchase. Again, it seems clear the opposite is the case.

So that is why I argue strongly against changing the bylaw to require a 12-month minimum rental, unless the bylaw amendment gives the Board of Directors authority to approve a lease term as short as 6 months for situations like those discussed above.

Overall, I believe the best approach is to adopt the “Proposed Leasing Bylaw Amendment” viewable at
http://msa-towncenter.blogspot.com/2007/08/proposed-leasing-bylaw-amendment.html

Discuss the rental issue (and more) in the new online community message boards for Market St. Residents!

2007-10-01T00:16:00.001-04:00

http://marketstreet.proboards83.com/

http://marketstreetcondos.net

THE UNofficial Market Street Message Boards & Website

· Discuss the rental issue

· Find another resident with similar interests

· Vote on and create polls

· Carpool w/ other residents!

· Sell & Buy products and services w/o ever having to leave the building!

· Rate Town Center restaurants / bars

· Send emails to other registered members

…and much more!

*Boards are currently still under development & site is currently focused on rental issue

Bob Bruss, The Real Estate Mailbag

2007-09-24T10:03:00.000-04:00

This was published in Bob Bruss' column in The Washington Post on Saturday, September 22, 2007.

Dear Bob: We are considering buying a three-year-old condo in a building that has a 48% rental population. The homeowners association has no rental restrictions other than a six-month minimum lease. We plan to live in our condo for a long time, want a stable living environment in a well-maintained building and are interested in making a solid investment. Do you recommend we proceed with this purchase?--Kathleen L.

Dear Kathleen: No. Forty-eight percent renters is extremely high for a fairly new condominium. That is a bad sign because there are too many absentee owners.

Your interest rate, if you can obtain a mortgage in that building, will probably be much higher than for a condominium complex where there are few renters. Because there are more than 20 percent renters, my best advice is keep looking.

A high percentage of renters shows that owner-occupants steer clear of that property. When the building was constructed, maybe the developer couldn't find enough owner-occupants and he sold to absentee investors who wanted to keep maintenance expenses as low as possible. Also, renters are more likely to cause behavior problems, whereas owner-occupants want to maintain the property to higher standards.

Posted By Vince, owner-occupant, 402

“Leased Unit”

2007-09-14T17:11:00.002-04:00

What does the term “leased unit” mean?

At the 10 September unit owners meeting regarding proposed amendments to the leasing bylaw, it was claimed that as many as about 160 units (about 48%) may be leased units, but that our Condominium Association may have in its files a copy of the applicable lease for possibly as few as 50 units.

I say the term “leased unit” should apply only to units for which the Association has on file a copy of the current lease for the unit.

If the term “leased unit” is being applied to units for which no lease is in Association files, what is the basis for applying the term?

The existing bylaw (the one in effect since our Market Street at Town Center Condominium was established in October 2004) is clear that no residential unit may be leased unless a written lease exists. But I can find no evidence that the Board of Directors has ever enacted a requirement that our Condominium Association be provided a copy of such lease. If the Board hasn’t enacted such a requirement, it should do so expeditiously. Tenants shouldn’t be allowed to move in unless a copy of the applicable lease has been provided to our Association. And, for units thought to be leased, but for which the Association doesn’t have the current lease on file, the Board should expeditiously enact a requirement that a copy of the applicable lease be provided to the Association as soon as reasonable—perhaps within 30 days of notice of the requirement.

Also, here are some other questions regarding what is defined as a “leased unit”: Is a unit that is owner-occupied, but also has a non-owner paying rent to live in the unit considered a “leased unit”? What about a non-owner claimed to not be paying rent, but where it is acknowledged the non-owner is contributing toward expenses? What about a case where a non-owner (who is not the spouse of an owner of the unit) is living in a unit, but there is no acknowledgement or evidence that the non-owner is paying anything at all for the privilege of living in the unit? What about this situation, except that no unit owner is living in the unit? Do the answers change if the resident non-owner in these examples is a member of an owner’s immediate family (parent or adult child)?

Procedures

2007-09-12T14:44:00.000-04:00

The google blogs (Market Street @ Town Center is just one example) do not allow new authors automatically. I am on travel in Italy so I have not been as attentive as normal. Even if I could let anyone post, we might quickly get into trouble with spam. You have three options:

1. Email your post to babcockr.msatc@blogger.com with an appropriate subject and identify yourself in the message.
2. Create an account and use it to add a comment to an existing post.
3. Send an email to me: bobbab@comcast.net and I will send you an invitation to become an author. Until Thursday, September 20, I will check requests at least once a day, then more often.

Bob Babcock
Unit 224

msa-towncenter blog

2007-09-12T11:17:00.001-04:00

Bob

thanks for setting up the blog, however, i agree with Jeff about the difficulty of logging on. what's the trick? i have spent a lot of time trying to figure out how to post to the blog, yet am unsuccessful. we have established an account, are able to log on, but no where does the "new post" appear. what are you referring to in your initial email "p.s." when you say "right click." right click on what? can you send/post a URL or additional guidance that explains the process better.

thanks.

Post to MS @ TC Blog - how to?

2007-09-10T10:16:00.001-04:00

Jeff Taggart - Unit 450

I've made several attempts to post to the blog with no success. I've
created an account etc... but for some reason, for me, it is not self
evident what to do. I am reasonably web, internet and PC, Mac savvy,
but cannot figure out, from all of the screens I've read and looked
at how to post to this blog. Any help you can give will be appreciated.

Where Are the Voices?

2007-09-06T20:15:00.000-04:00

By Vince Sescoe, Owner-Occupier, 402

"Why can't we have an interactive website? We pay enough in condo fees," was the (paraphrased) statement of a homeowner at the first meeting to discuss the leasing issue.

Captivated by that moment I thought, "Wow! We have a spirited group on both sides of this issues. If nothing else, there will be a lively debate on this daunting issue, and we'll accomplish something here."

Wrong!

It has been three weeks since a Good Samaritan developed this Blog in response to the argument that an electronic forum was needed to communicate and discuss the issues and challenges that face us, yet few have chosen to use this medium! What's up with that, folks?

Do we really care about what happens in our community? Is the prospect of becoming Market Street at Town Center Apartments so appealing that you can afford to remain silent?

Where are the voices?

It Ain't Arbitrary, Folks!

2007-09-03T17:05:00.000-04:00

What the Experts Say About Lease Caps in Condos
By Vince Sescoe, Owner 402

Condominium Associations across the area and around the nation are enacting amendments to their bylaws to establish leasing caps in response to resident homeowners’ concerns regarding growing numbers of renters in their condominium building.
Typically, owner-occupiers point to wear and tear on their building due to the fact that renters have no interest (stake) in keeping the building in top condition; the impact large numbers of rentals have on the market value of owners’ units; the associations’ inability to get favorable insurance rates for buildings with large numbers of renters; a decline in the number of people available to serve on the many committees necessary to run large condos; and the unfavorable rates available to owners who wish to refinance or to buyers wishing to apply for a mortgage.
Frequently, the response from the experts--real estate, financial and legal--consists of enacting a lease cap to amend the association bylaws. In this regard, the most frequently mentioned is the 70/30 rule. Basically, this refers to 70% of the condo units being owner-occupied and 30% rented. In our building (334 units), the 70/30 rule would mean no more than 100 units rented at any given time. (That's still a reasonable number.)
And who are these experts? None other than:
Ilyce R. GLINK, an award-winning, nationally-syndicated columnist, television reporter, radio talk show host and best-selling author. Ms. Glink has won numerous awards, including Best Consumer Reporter, from the National Association of Real Estate Editors and the first Money $mart award from the Federal Reserve Bank of Chicago. (http://www.thinkglink.com/)
Benny L. Kass, a Washington, DC lawyer who writes regularly for The Washington Post. His practice, Kass, Mitek & Kass, PLLC, provides housing counsel. (http://www.kmklawyers.com/)
Michael Inman, publisher of the Virginia Condominium & Homeowners’ Association Law Blog, and a partner at Inman & Strickler, PLC. (http://www.vahoalaw.com/)
The Realty Times, Real Estate News and Advice. (http://www.realtytimes.com/)
So folks, the 70/30 rule wasn't conceived in a vacuum. It has been considered and enacted by many condominium associations.
We might disagree on the numbers, but we mustn't disagree on a solution. If we do, we will be on a glide path to disaster.
Cheers,
Vince Sescoe
Chair, Lease Policy Committee

market street blog

2007-08-31T20:15:00.001-04:00

221

Barry Siegel

Hi,

this is a good idea. i should have thought of it, lol.

anyway, i'd like to be able to comment on other issues or observations i may have, such as "i noticed the door into the garage was propped open the other day," but I read that the main topic is the leasing issue....pls advise on that.

thx,

Barry (owner)

Proposed Leasing Bylaw Amendment

2007-08-31T14:40:00.000-04:00

Based on comments made by unit owners at the Leasing Committee meeting Tuesday night, 21 August, I revised my proposed bylaw amendment to the version shown at the end of this posting. As before, the block font is the bylaw as it has read since our Condominium was created in October 2004. My proposed amendment of that bylaw consists of the several italicized sentences that I have inserted.

I would like for this proposed amendment (the italicized sentences) to be considered point-by-point to see if we unit owners can arrive at a consensus regarding an amendment that can garner the approval of the requisite two thirds of the unit owners.

My below proposal differs from the Leasing Committee proposal (the one mailed to unit owners approximately 6 August) primarily in these respects:

1. My proposal doesn't affect any current unit owners at all, regardless of whether they are currently living in their unit or leasing their unit. But my proposal would probably pretty much assure that the only people buying units in our condominium after approval of the proposal would be people planning to live in our condominium. While my proposal would make our condominium unattractive to potential future investor buyers, it would simultaneously make our condominium more attractive to potential buyers preferring to live in a condominium on its way to being close to totally owner-occupied.

2. My proposed bylaw amendment doesn't include specifics such as (a) a 12-month minimum lease term (versus the 6-month minimum specified in the existing bylaw) and (b) 30% as the maximum acceptable percentage of leased units in the long term. Instead, my proposal authorizes the Board of Directors to decide which rental requests of the future owners should be granted, using whatever criteria the Board believes are in the best long-term interests of the unit owners in general. My view is that the percentage of leased units should be extremely low after 10 years or so--perhaps as low as five percent or so--but future Boards of Directors would decide such matters based on their best judgement as tempered by the preferences of the unit owners that elect the Directors.

Though I am not a member of the Leasing Committee, or any other condominium unit owners association committee or board, I am a concerned unit owner who takes a great interest in issues involving our association. I encourage unit owners to post comments regarding the below proposed leasing bylaw amendment.

Paul Rasmussen
Owner/resident Unit 305

Proposed Amended Version of Bylaw Article XI, Section 1, Paragraph (f):

(f) No Residential Unit shall be rented for transient or hotel purposes. No Residential Unit shall be leased or rented for any period less than six (6) months. No Unit Owner shall lease a Residential Unit other than on a written form of lease requiring the lessee to comply with the Condominium Instruments and rules and regulations, and providing that failure to comply constitutes a default under the lease. The Unit Owner shall provide a current copy of the Condominium Instruments and such rules and regulations as have been promulgated as of the date of such lease to lessees. The Board of Directors may provide a suggested standard form lease for use by Unit Owners. Unit Owners whose deeds were not recorded among the land records of Fairfax County before 60 days after the date of recordation of this amendment have no right to lease their unit. However, the Board of Directors is hereby authorized to permit—on a limited case-by-case basis—some members of this class of Unit Owners to lease their unit. The Board of Directors may use whatever criteria it deems appropriate to decide if authorizing a requested rental will be in the best long-term interests of the Condominium Unit Owners in general. Such criteria may include, but are not limited to, hardship the requesting Unit Owner might suffer if leasing of the unit is not permitted, the percentage of units in the Condominium that are already leased, the requested duration of the lease, the estimated probability that the requesting Unit Owner will move into the unit at the end of the lease term, whether the intended lessee is related to the requesting Unit Owner, and the character of the intended lessee. Unit Owners whose deeds were recorded before 60 days after the date of recordation of this amendment do not need Board of Directors authorization to rent their unit, being subject to the terms of this bylaw as it read before this amendment thereto. The foregoing provisions of this subparagraph, except for the restriction against use for hotel or transient purposes, shall not apply to the Declarant, or a Mortgagee in possession of a Unit as a result of a foreclosure or other judicial sale or as a result of any proceeding in lieu of foreclosure.

Leasing

2007-08-28T21:20:00.000-04:00

Rosalie Williams

Owner, Resident Unit 456

Landlord of Unit 172

Regarding the proposal of 30/70, I would like to suggest the following be considered for leasing by-laws.

1. If a complaint is made to the concierge regarding a renter, that complaint should be immediately sent to the owner of the unit.

2. If more than 3 complaints are received regarding the same renter, the owner of the unit should pay a fine.

3. Leases should be no less than 12 months in duration.

4. All of the above should be applied to rentals starting after January 2008

Additional thoughts:

1. Most investors/landlords think they are renting to good people, so they should be held responsible and notified immediately when the renters are contributing to devaluing the condos.

2. The title of this building is Market Street Condominiums not Market Street Apartments...this is not an apartment building.

3. Many buyers plan to live here as their retirement home while others are hoping this property will increase in value so they will be able to sell and use the money for a single family home. Both perspectives deserve doing all we can to increase the property value and not allow it to be devalued.

4. The investors/landlords should be held responsible for the people they rent their units to.

Great Opportunity for Open Dialogue

2007-08-22T19:44:00.000-04:00

Thanks for creating this Blog. This is a great opportunity for MS@TC owners to communicate. I trust it will be used as a means for all to bridge the divide between those who support and those who oppose the draft proposal.
Cheers all,
Vince

Introduction

2007-08-21T20:53:00.000-04:00

This free web log (blog) was created as a service to the owners (and renters) of Market Street @ Town Center Condominiums. Save this web addess, http://msa-towncenter.blogspot.com/ as the way to read the contributions. To contribute as yourself you will need to have an account, or you can email to this blog: babcockr.msatc@blogger.com. In your account (or the text of your message), please identify your unit number and your name. If you are not an owner, indicate your relationship to the Market Street @ Town Center Condominiums such as: renter, manager, concierge, prospective buyer, broker, etc. Please make an effort to keep your comments short and concise. A separate contribution for each point with an appropriate title (subject) would be most effective. Extraneous or anonymous contributions will most likely be deleted.

The main issue for discussion is the advisability of a change to the bylaws with the intent of controlling the ratio of renters to resident owners. This is a forum intended for those with a vested interest in Market Street @ Town Center property values and quality of life therein. The purpose of the forum is a free and open exchange of opinions and ideas.

Bob in 224

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