Faced with residents’ perceptions that a growing number of rentals were sprouting up in Mesa’s first master planned community, the Dobson Ranch HOA has started a registration system that charges fees to owners who rent out their properties.
Approved last fall by the executive board of the Dobson Association, the development’s nonprofit homeowner’s association, the system officially began in January and requires property owners to pay a $95 fee with each new lease. The policy also requests that a copy of the lease be provided to the HOA. Failure to register the property with the HOA results in assessments that began this week.
Frank Mizner, the executive director of Dobson Ranch’s HOA, said the aim is to get a better handle on rentals within the development and make tenants aware of the HOA’s rules. It was developed last summer based on residents’ concerns.
"We heard from a number of people who felt like there were an excess of rental properties in Dobson Ranch and that they were not being maintained very well. At the same time, we were looking for ways to increase revenues," Mizner said.
Throughout the East Valley, investors have contributed to the housing market’s heat by gobbling up available properites, often replacing a for sale sign with a for rent sign.
Scott Carpenter, a Tempe lawyer whose firm specializes in representing HOAs across Arizona including Dobson Ranch, said that rentals can impact overall property values.
"Whether it’s legitimate or not, there remains a notion that rentals are bad for a community," Carpenter said.
It’s the HOA’s responsibility to protect those values through the creation and enforcement of rules. And while the policy may be new at Dobson Ranch, HOAs across the Valley and the state have rental policies, Carpenter said.
The concept "is as old as condominiums and planned communities in Arizona," Carpenter said.
Dobson Ranch is one of the East Valley’s oldest master planned communities. With about 5,000 homes and 15,000 residents, the development roughly spans from Loop-101 east to Alma School Road and south of Baseline. Key features of the development include a golf course and eight artificial lakes.
Having celebrated its 30th birthday, the development is requiring some significant maintenance, including lake improvements and refurbishment to the thousands of feet of walls that surround the community, Mizner said. The $95 registration fee was aimed at helping offset those costs.
But board members also wanted to ensure that tenants are informed of the HOA’s policies up front, Mizner said.
"Renters aren’t made aware that they have to keep up the yard, that they have to keep weeds under control. That they can’t keep an RV on their property," Mizner said. "Every owner gets a copy of the (HOA) rules, but if you’re renting, you may not be aware of them."
Ron Hanley, of Tempe, owns two rental properties within Dobson Ranch and has embraced the new policy.
"Initially, I was upset about it because I don’t know that they have the authority to enact such a policy. But on the other hand, I understand the problems they have with landlords who don’t control their tenants," Hanley said.
Hanley, who is an executive board member of The Lakes’ HOA in Tempe, said there are different types of landlords and tenants. Although some landlords have hands-on management styles and good tenants care for a home, it’s not always the case, he said.
Gilbert’s Stone Creek community asks that property owners voluntarily register with the HOA and asks owners to include a copy of the HOA rules with the lease, said Sean Madigan, a Stone Creek HOA vice president.
Scottsdale’s DC Ranch community requires a six-month minimum lease and asks that a copy of the lease and the name of the tenants be submitted to the HOA, said Melinda Gulick, town manager.
"We find it critical to know who’s renting. People leasing property are residents, too," Gulick said.
Carpenter pointed out that "more and more lenders in standard real estate transactions are asking the HOAs what percentage of the units are rented. And there’s no way to know that in a community the size of Dobson Ranch if you don’t have a system."
According to Mizner, the HOA first sent out about 1,100 letters to properties that were thought to be rentals, of which 800 were found to be rentals. Of those, 480 owners have complied and registered "leaving about 320 that have not paid their fee."
Despite that, just a handful of owners have formally objected to the policy at a board meeting, he said.
After publicizing the policy throughout the fall, discussing it at numerous board meetings and issuing some extensions, this week the HOA began assessing a $300 penalty against owners who fail to register their rentals.
And for Ron Hanley, Dobson Ranch’s policies have got him thinking.
"Some of these HOAs have got to do something about the landlord-tenant problems. We have a lot of problems with that at The Lakes. We’re going to have to do something," Hanley said.