How Can an Association Tell if there is a Tenant or a Rental?

Some community association CC&Rs have restrictions on leases, rentals or numbers of tenants.  Some associations have similar rules where the CC&Rs authorize such rules.  The problem many of these associations experience is trying to determine whether there is a lease, and who are “tenants”.  What’s the difference between a tenant and a guest or a roommate?

One approach that an association can take to find out if a lease exists is to require (in CC&Rs or rules if possible) a “tenant registration form” or a copy of the lease.  The registration form can be justified for health and safety reasons – knowing who is living in a home.  The association can also impose fines on the landlord for the failure to provide the form or lease.  However, this level of monitoring is not for every board or association.  In addition, not all documents with rental restrictions have this tracking mechanism.  Even if they do, it may be hard to prove there is a rental agreement or tenancy in existence. 

You do have to review your governing documents for any particular language defining terms such as tenants or leases.  If there is nothing in the documents, the Arizona Residential Landlord-Tenant Act helps.  A.R.S.§33-1310 defines “rental agreement”as all agreements, written, oral or implied by law, embodying the terms and conditions concerning the use and occupancy of a dwelling unit and premises.  Therefore, a rental agreement or “lease” can exist without a written document. 

Moreover, a “tenant” under the Act means a person “entitled under a rental agreement to occupy a dwelling unit to the exclusion of others”.  Therefore, tenants can be more than persons named in a written lease as the rent-paying tenants.  If the rental agreement, written or oral, allows other persons to occupy the premises, they are “tenants”.  An association is entitled to presume, in the absence of other evidence, that additional roommates or boyfriends/girlfriends/children occupying a unit are “tenants”.

What about occupants of units (not occupied by the owner) that are relatives of the owner?  Typically they have other occupants, guests, and roommates as well.  Is the payment of money as rent a determining factor a rental agreement exists?  Not according to the definition above.  There is no mention of “rent” in the definition of “rental agreement”.  Rent payments are one form of consideration, but there can be others, such as simple mutual promises.  However, the wording of particular CC&Rs can make a difference.  There may be specific exceptions for “guests of owners” or similar language that has to be considered. 

The bottom line is that associations are not powerless when faced with questions of whether leases or rental agreements exist.  Support is available in the Landlord-Tenant Act.  Support is also available in your documents, and your documents can be amended if the issue of “who is a tenant” is a problem.

For further information about restrictions and rules regarding tenants and leases in associations, contact James Hazlewood or another attorney in the office.