Is it time to sell this VR?

[Michael Greenberg]

One of my HOA's in Arizona is proposing a drastic change to the CC&R's and has put this out to vote of the community. In order for it to pass, it would require a 2/3 consent of the neighborhood. It will be tough for the HOA to gain 2/3's agreement, but if they do I'm out of business on this property. I am also very concerned about my property value declining as Scottsdale is such a big vacation destination and heavily investor focused.

In a nutshell the HOA is requesting no vacation rentals (VR's), no subletting, no room renting, and a minimum term of 60 day rental terms. The state of Arizona legalized VR's last year that restricts municipalities from disallowing them, but does not restrict HOA's. Has anyone had any experience with this or something similar?

I am thinking it is time to sell NOW. I have checked in with a few neighbors and they are against it, but I'm still uneasy. They HOA will not release a list of the neighborhood so I have no way of petitioning against this. I am seeking advice of an attorney but always looking for some input from the BP community. What would you do?

Thanks!

Mike

[Michael Greenberg]

@Kevin Lefeuvre Thanks for the input, no HOA has been added to my criteria going forward as well. Cash on Cash needs to be north of 10% otherwise I might as well buy and hold, renting long term. My attorney responded with the below and I am moving forward putting the HOA on notice. If nothing else it might scare them into submission. No HOA wants to ever hear from an attorney.

"If they don’t get the 67% approval, then it is not enforceable and you don’t need to worry about it.

That being said, in my opinion there’s also a strong argument that they require 100% approval of the condominium unit owners. A.R.S. § 33-1227(D) requires unanimous consent of all unit owners if an amendment changes “the uses to which any unit is restricted. Because the proposed amendment changes the use by prohibiting certain rentals, I think this provision should apply.

I also have a problem with the Written Consent as it does not allow you to vote no.

Written Consent says deadline is Jan. 31, 2018.

We could put together a letter objecting to the proposed amendment if you’d like."