FEMA’s announcement that the organization is considering using foreclosed upon homes as storm shelters poses potential problems and issues for the homeowner associations that manage those particular single family home communities in South Florida. It is not yet clear from what has been proposed as to whether or not the occupancy is going to be through a lease transaction or whether the lenders are going to be expected to “donate” the use of the property for this purpose. In all likelihood, there will be some rental payment for the use.
A great many of the communities in South Florida have occupancy limitations in their governing documents which often require the prior approval of the Board before any individual may take up residence in the community. The documents of a community typically require the submission of an application by the proposed resident, which will also involve a background check and the payment of a fee for the application process. The documents typically provide between 15 and 30 days for the homeowner association Board to undertake the review process before making a decision on whether or not to approve the occupancy. This does not leave enough time for the approval process to run its course when a hurricane has passed and left a number of displaced persons needing housing fast. Other restrictions include limitations and/or prohibit the occupancy by “guests” when the owner of the property is not in residence. There are a number of community documents that contain covenants that prohibit leasing.
For right or for wrong, a large percentage of the communities in Florida are not free and open for people to just come and go as they wish without homeowner association involvement. The proposal would likely not involve the association in the communities that are being considered, which will be problematic to the residents and representatives of those communities. If the displaced occupancy will be for a long term, homeowner associations are likely going to want their documents followed. If governmental agencies and lenders choose to ignore an association’s bylaws and governing documents, it will most likely result in a legal challenge from the affected community associations.
