Lease Addendums
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LEASE ADDENDUM

QUESTION: Our board is frustrated with delinquent homeowners who collect rent on their units but refuse to pay their dues. Is there anything we can do?

ANSWER: You could implement a lease addendum (sometimes referred to as a supplemental lease agreement) which assigns rents to the association. Whenever an owner leases his unit, both the owner and the tenant are required to sign the association's lease addendum that requires, among other things, (i) the lease be for the entire unit; (ii) no assignments or subleases are allowed; (iii) the lease is for not less than one year; (iv) tenant agrees to comply with the association’s governing documents and be subject to the its disciplinary procedures; (vi) owner assigns rents from his unit to the association in the event he becomes delinquent; and (vii) tenant agrees to pay the owner's assessments should he become delinquent.

Effective Tool. The addendum provides a tool that associations need to hold both the homeowner and the tenant accountable since they are parties with the association to the agreement. As a result, a demand letter from the association's legal counsel with the relevant documents and a threat of litigation is sufficient to get prompt payment of the delinquent assessments.

Rules Enforcement. The addendum is also effective in bringing a wayward tenant into compliance with the rules. Per the signed agreement, the owner and the renter are subject to disciplinary action. Both can be fined and, if necessary, sued. Moreover, the agreement can give the association the power to evict the tenant for violation of the terms of the lease addendum.

Recommendation: If your association has problems with delinquent landlords or problems with rules enforcement involving tenants, a lease addendum can solve both problems.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC