Renters, Bearing the Brunt of Unpaid Assessments (Oregon Law)

March 13, 2011 | By: Greg B. Coxey

In today’s economic climate, many owners of condominium units, townhouses, and single-family homes are opting to rent their homes in lieu of trying to sell them in a down market. This scenario, however, has the potential to create many problems for homeowners associations. One such problem is what to do when an owner has a renter in the homes, but the owner is failing to pay assessments.

In issues regarding unpaid dues, an owner/association relationship often points blame to residents, rather than the owners themselves. In a recent case vis-à-vis unpaid assessments, an association brought suit against a renter of a townhome for failure to pay assessments. Though the resident was the wife of the owner and the owner himself did not reside in the unit, the trial court found in favor of the association. This decision was later appealed and overturned, as the appellate court agreed that the current renter was only a resident, and the association had no recourse when it came to renters. This case illustrates an important point: unless there is a provision in the governing documents that allows the association to collect assessments from the renter, there is nothing the association can do to collect past due assessments from the renter.

When it comes to renters, it’s necessary for associations to understand that they are free to give the resident copies of the governing documents, rules, and regulations, as well as notify them when the aforementioned are being violated. However, the association’s recourse for violations lies with the owner of the property, and not the renter. The owner is legally responsible for anything that his or her renter does based upon signed governing documents upon purchase. This means that the owner is subject to fines and other legal remedies as a result of their renter’s conduct, and it is the owner’s responsibility to control said renter, even in cases of necessary eviction.

In the common problem where an owner is still violating their governing documents by refusing to pay assessments, the association cannot look to the renter for compensation. The resident is not obligated to the HOA, and they cannot force the renter to turn over payments to cover the owner’s delinquent dues.