Condo or Hotel?

guest blog by Deborah Goonan

AirBnB, VRBO, and online vacation rental sites have taken on a life of their own. Now condo owners can arrange to rent their units by the week, with the click of a few buttons. But some Florida condo owners are upset that their condo building has been overrun with tourists from all over the world, making their homes feel more like a hotel.

In the video report linked below, Michele Gillen, CBS4, Miami Beach, features Octagon Towers, just steps from South Beach. One condo owner laments that she no longer knows her neighbors, because they change every week. The problem has been ongoing.

The City of Miami Beach is threatening to shut off utilities to Octagon Towers, if owners do not cease and desist short-term rentals. That’s against city fire code. And Miami Beach already has dozens of hotels and Condo Hotels specifically permitted for vacation lodging.

But that doesn’t stop Condo Board member Sigmund Esposito from breaking condo restrictions and city codes all day long. Check out the interview of his vacation tenants, who were apparently unaware of the City’s ordinance restricting short-term rentals in residential condominiums.

Here’s my take on this. Octagon Towers is but one example of why condo owners frequently disagree about how their Association should be governed and managed. There is almost aways a conflict between the owners who actually live in their units and the owners who rarely stay in their units, but want to collect maximum rent.

So, here’s a suggested solution. If we are going to create RESIDENTIAL condominiums such as Octagon Towers (where long term leases may be allowed), then let’s not run the Association like a corporation! Don’t hand all the power to the Board, and don’t allow corporations to own individual units as if they were actual “persons.” (Searching public records for Octagon Towers, I noticed quite a few LLCs as owners.) Treat residents as actual citizens of their community, albeit a small community. Pre-screen buyers and long-term tenants to be certain they are looking for a place to live in peace and quiet, and not a money-making revolving door for vacationers.

Steer those hoping to make a killing on vacation rentals to what should be called INVESTMENT communities, such as condo hotels. Perhaps this is the kind of Association CAI had in mind when it decided years ago that “Community Associations” are businesses.

Some may be. But most aren’t — or shouldn’t be

(Miami Beach Condominium Reportedly Being Used As A Hotel « CBS Miami)

(Just in case you want to know what a condo hotel is:)

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Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

2 thoughts on “Condo or Hotel?

  1. AngelaB

    You are correct about renters vs owners. I know short term leases are not allowed in my HOA, but there is definitely a problem with all the renters. The renters tend be 20-something young partying types or single parents with small children while the owners who live in my community are older adults or singles/couples without kids.

    There has definitely been a lot more noise since more and more units are being rented. It feels like I live above a frat house with all the partying going on, even during the day. Also, I’ve noticed the buildings have deteriorated since renters either don’t notice problems or don’t care to report them. Crime has gone up too.

    What really bothers me is that many of the rented units are managed for their owners by the same property management company that manages our complex. I find that very suspicious, and it frustrates me that noise complaints about my downstairs neighbor, a unit rented through this property management company go ignored. Granted I don’t complain about the daytime noise–just the night time noise after 11 pm when I’m trying to sleep. It seems that renters get preferential treatment while owners are nagged to death.

    1. Deborah Goonan

      Here’s the reason that renters seem to get preferential treatment: quite often the owners of rental properties control a voting bloc for the association, and perhaps control the Board. These owners usually don’t live on site, and don’t have to put up with noise, crime, or any other problems that might arise due to loose managment of the community. They simply collect the rent every month.

      The fact that the management company is also managing the rentals for off-site landlord-owners is fairly common. Kind of a conflict of interest, in my opinion. The CAM is double dipping — making money from association assessments AND a percentage of rents coming in from units he/she manages.

      A well-managed apartment community generally has no problems with multi-generational residents. It starts with screening tenants, and then nipping problems in the bud if and when they occur. Because everyone is renting in a traditional apartment community, the owner definitely wants positive reviews and word of mouth to keep the units rented, and vacancy rates low.

      But in a condominium situation with a mix of owner-occupants and owner-landlords, with a COA Board it becomes an “us vs. them” dynamic with competing interests.

      Incidentally, 90% of noise problems could be prevented with quality construction. Like THAT will ever happen!


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