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HOA Or No HOA – Landlords Should Be Checking On Who Is Writing Them Checks Every Month.

Arizona recently passed a new law, SB1454.  In a nutshell, the law which goes into effect in September, rules that “HOAs will no longer be able to ask homeowners to conduct background checks on their renters and landlords will no longer have to give HOAs renters personal information.” 

Many homeowners' associations belong to crime-free programs, which partner with local law enforcement to ban convicted felons, sex offenders and drug dealers from renting in their communities. Come September, property managers, investors, private owners or others, can rent to anybody despite HOA rules and regulations that prohibit sex offenders, drug dealers, felons, etc.

Those opposed say the new law will:

  • Jeopardize the safety and security of hundreds of communities across the state
  • Takes away the safety and the security of every HOA in the state of Arizona
  • Take away a homeowners peace of mind of living in a designated crime-free community

Those in favor of the law say:

  • It gives rights back to property owners to rent their property out to who they want without restrictions.

No matter your opinion on the new law, or what your opinion is about HOAs, here is what a landlord should be doing:  BACKGROUND CHECKS.  It doesn’t matter if the home is in an HOA or not, it doesn’t matter if you are a licensed property manager or not, it doesn’t matter if you want the neighbors to like you or not –  the priority should be protecting yourself and your home.

As an investor and a property manager, I personally want good tenants in rentals – whether it is in an HOA or not.  But also, I want the neighbors to be happy – you see, happy neighbors do things like call you when something is wrong, help you watch the property when it’s vacant and do other things to make your job easier.

Remember, law or no law, if you bring crime into a neighborhood – you bring it into your home.  Do background checks and protect yourself and at the same time, others.

Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.KGCPropertiesLLC.com .

                                                 

 

This blog is written with my opinions and my opinions are  presented with accuracy but not guarantees. Please talk to a professional before making any real estate, financial or agency decisions.    Gabrielle Kamahele Rhind - 2014. If you want to reprint parts of this - just email me for my permission: KGCProperties@gmail.com .

 

Comment balloon 34 commentsGabrielle Kamahele Rhind • July 20 2013 06:52AM

Comments

Good morning, Gab.... it's as  important to other residents in the area as it is to the landlord.... the landlord is not living with tenants....the neighbors are.... good article, Gab....suggested...

Posted by Barbara Todaro, "Franklin MA Homes" (RE/MAX Executive Realty ) about 5 years ago

Very interesting, but I agree with you, that the landlord/owners should do background checks regardless if it is not required. 

Posted by Kathy Stoltman, Ventura County Real Estate Consultant 805-746-1793 (Rockwood Realty) about 5 years ago

Keepin up with new law changes is so important in our industry.  Background checks are a vital part of the qualification process regardless of law changes.

Posted by Mark Delgado, Benicia and Vallejo, Property Management, rental h (houses for rent, Solano County & Glen Cove) about 5 years ago

GOOD MORNING MARK!  Yes, could not agree more!

GOOD MORNING KATHY!  Background checks are so important and most do not realize how important until it's too late!

GOOD MORNING B!  Thank you - well said that the neighbors live with the tenants - it's important to be respectful of that!

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) about 5 years ago

Hi Gabrielle, I think it should be the Landlord's responsibility to do background checks. Protecting yourself and your home is important.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 5 years ago

GOOD MORNING MICHAEL!  I think so too - and many o not because it costs money - but to me, it's money well spent!  Did your sister's house make it through the monsoon that tore through Tucson yesterday?

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) about 5 years ago

I am renting a property out now and I talked with a neighbor and they definitely have a stake in the what is going on...Landlords need to know

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 5 years ago

Like everything else, ,you have to be very careful what reasons to use to refuse a tenant's application. .and how you say it is very important for your own safety. .

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) about 5 years ago

Some really great information.  Thanks for sharing with us on Active Rain today.

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) about 5 years ago

That is a really interesting blog, thank you,

Eve in Orlando

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) about 5 years ago

Gabrielle, I've been following this bill with interest.  As you said, whether you're  for or against having a "rule", a background check is a GREAT idea for any landlord.  

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) about 5 years ago

My goodness.  This is just plain common sense. 

Unless an owner or landlord is engaged in criminal activities WITH the tenant, why would a landlord NOT want to investigate a rental applicant???

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 5 years ago

Gabrielle - I have some friends that live off of Silver Bell. Her partner is the head of their HOA. I'll be curious to hear his opinion on this matter. I'm sure it won't be all that positive. (He's always ranting about something or another) Good post. Thanks for sharing. 

Posted by Jeff Stevens, Jeff Stevens REALTOR®/Associate Broker (Berkshire Hathaway HomeServices New Mexico Properties) about 5 years ago

I had a property that I rented out to a single mom.  After she moved in, she also allowed her boyfriend a registered sex offender to move in as well.  Obviously he was not on the lease so I had not run a background check on him.  It is challenging to prove whether he is truly living there or is just hanging out there when she is home.  So even with a proper background check, these criminals find a way.  Within 6 months she moved out anyway so little I could do further.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) about 5 years ago

I have been a landlord and it is important to run bankground and credit checks on the potential tenant.  However, it is the landlord decision to whom they select has a tenant and not the condo association.  I have seen landlords take a tenant with low credit score since they knew the person.  This may not happen if the condo association gets involved.

Posted by Keith Lawrence, ABR, CDPE, SFR, 203K Specialist (RE/MAX Properties) about 5 years ago

Good blog Gabrielle! You touched upon two very important issues. One... who is writing the checks for the rent? Could this tell you something about who else 'not' on the lease maybe living there?

Two.. the importance of conducting due diligence on renters. Beyond the criminal and credit checks, I always do a meeting at my office with the prospect tenant, and unknowingly to them, I conduct an interview at the same time. Do they show up on time... are they willing to come to my office... who do they show up with... This pays back several times.

Here's a little bit of advice that works well with my own rentals. In the lease, I offer free replacement and install of the air filter(s) for the A/C. So this allows me, every second or third month to access the property and check things out. Also, I make sure they understand that I will do all the required repairs on the property if they tell me. Rather than just sending a service person, I go and check myself what needs to be done. Another opportunity to survey the property.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (AZuRE Team - Realty ONE Group) about 5 years ago

Great article, Gabrielle.  I live in Colorado where every neighborhood (it seems here) has an HOA. 

I'm thinking of keeping my lake house and renting it so your advice and suggestions are really important for me. I want good renters in my home and I intend to do background checks and a credit check on all applicants beore I turn over the keys to my renter.

Thanks so much for the insight.

-- bart 

Posted by Bartley Wilson, VR Software and 360° Solutions (Virtual Pictures Corp. (VPiX)) about 5 years ago

Wouldn't take a tenant without a background check. And in most instances a credit check.

Posted by Bill Reddington, Destin Florida Real Estate (Re/max Southern Realty) about 5 years ago

Gabrielle, I have rental property myself and would NEVER rent a property without a background check. In Charlotte they recently passed a law where you have to register your property with law enforcement to try and curb crime for repeat offenders. That's perfectly fine with me as there are a lot of slum lords out there that could care less who they rent to as long as they can collect rent. Note, I didn't say "as long as the tenants pay their rent"...

Posted by Mitch Muller - Charlotte NC Real Estate, Certified Residential Specialist (ProStead Realty Charlotte, NC CRS SRES mitch@prostead.com) about 5 years ago

I agree with your end opinion.  Landlords and investors should be running background and credit checks for all renters regardless.  Most do, so I think that the new law fits well into my conservative Republican mantra and that the market will control itself.

Posted by Jay & Michelle Lieberman, Creating Calm in the Buying and Selling Chaos (Keller Williams World Class) about 5 years ago

I totally believe that landlords, as well as prospective tenants, should check each other out, however, why the HOA has to stick their nose into it makes no sense to me.

Posted by Jean Hanley, Specializing in Folks Who Want To Buy/Sell Homes (Coldwell Banker Kivett Teeters) about 5 years ago

Gabrielle, 

Whether it is legal or not, it is not good business sense.  We run credit and criminal on everyone, high level executive and just out of college students.  I would rather be consistent and SMART about who we put into rental homes.  

So far, my worst problem has been a slack divorced parent and underage kids who had already been to rehab.  Didn't know that as they were under 18!!!!  

Life is to short to just wing it.  Have a good process and follow it - this is critical for doing a good job in property management.   We frequently tell our owners we'd rather NO tenant than a bad tenant, it jjust costs a ton more than a vacancy does.

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) about 5 years ago

Gabrielle, would never rent a property without a background check. Does not guarantee or cover everything, but at least I did everything I could. I like to sleep rather than toss, turn, and worry through the night. :-)

Posted by Jane Chaulklin-Schott, TeamConnect Luxury Homes - Orlando, Florida, 32836 (TEAMCONNECT REALTY - (407) 394-9766) about 5 years ago

Gabrielle, whether be the HOA rule or not, every Landlord should have a background check on their tenants.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) about 5 years ago

You still have to take reponsibility for your own tenants. Sometimes it is hard to find a tenant in certain locales so you may compromise on what tenant you take. The HOA does not trust its owners.

Posted by Jimmy Faulkner, The Best Of St. Augustine (Florida. Homes Realty & Mortgage) about 5 years ago

Gabrielle  my take away is that so long as the landlord can still do background checks... all is well.  I can't imagine that many landlords would forego a background check.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 5 years ago
Gabrielle - doing background checks onto entail tenants just seems to make sense.
Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 5 years ago

I wonder if there's been some complaints against HOA since they are responsible for discrimination under Fair Housing.  A background check is a must.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 5 years ago

Are you serious? “HOAs will no longer be able to ask homeowners to conduct background checks on their renters and landlords will no longer have to give HOAs renters personal information.” 

Posted by Michelle Carr-Crowe Just Call 408-252-8900 Top 1%!, Family Helping Families Buy & Sell Homes 40+ Years (Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty) about 5 years ago

Gee whiz....I guess ....when we were landlords...we always checked every which way we could...not just the immediate past landlord but one or two before that....you would think common sense would prevail.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 5 years ago

I just turned down being the Go-TO property manager for a 37 unit self-managed HOA because the HOA wanted to be involved in the way I did business with the unit property owners...KUDOS!  Unless these rules apply to the unit PURCHASERS also, kudos for making this involvement illegal!

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) about 5 years ago

It doesn't make any sense at all that the HOA would NOT want background checks to be done.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) about 5 years ago

This is the key phrase ~ here is what a landlord should be doing:  BACKGROUND CHECKS.  It doesn’t matter if the home is in an HOA or not

Posted by David Popoff, Realtor®,SRS, Green ~ Fairfield County, Ct (DMK Real Estate ) about 5 years ago

While this may be something new for Arizona, HUD has maintained the policy that the Board of an HOA may not require the Board's approval for potential lessees.  If a condominium project wishes to be on HUD's approved condos list, this language must be absent from the project's legal documents.  Nice article.  I am going to re-blog it.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) about 5 years ago

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