"Duke of Hazard" wrote in message
om...
I recently bought a brand new duplex/condo four months ago. I live in
it with my parents but now they are moving to a different city. It is
too much space for a single person so I want to rent it out and buy
something smaller to move into.

My question is to what extent does the bank enforce the "owner
occupied" rule? Also the condo developer said I need to live in it for
one year before I can rent it out. Will anyone care as long as the
payments are made and the tenants are decent quiet people?

Also when I apply for a new mortgage to buy my smaller property, what
will they think when they see I am no longer owner-occupied on my
original mortgage?

Sorry if this is confusing but would really appreciate your advice and
experience.


The bank will not be knocking on your door ever to see who lives there,
especially if you make your payments. The only time they get involved is if
there is an event such as fire or vandalism and they get a report. Then
they need assurance that it is fixed to standards, and they could possibly
show up to take a picture. But even then, they usually have you get a form
notarized, and it's the insurance company to worry about the rest. All they
care about is that you have a renter's policy, which is good for you because
it takes off the personal possessions coverage and includes things such as
rent reimbursement while the unit is being repaired after a fire or other
incident.

The condo developer has little to do with it once you buy the unit. At that
point, it's up to the condo association to deal with the issues. They
typically don't go door to door either, and don't have access to your unit
unless it's for repair of a common area, and even then, they will ask for
permission unless it's an emergency.

The rest of the issues are legal ones, and this is not the forum for it.
Try one with legal in its name. The bank's primary concern is that they set
the interest rate based on certain risk factors, and they consider rental
units more risky for reasons I couldn't tell you. If something happens to
the unit, the worst they could do is have you charged with fraud, but again,
this is not the place for legal advice. I doubt that they would make a big
deal over it.

Condo associations can be pretty difficult to deal with in some places. You
can't be sure that a potential tenant is a quiet, decent person, but the
best bet is to comb through the association documents and see what they say.
There might be a fine schedule for nuisance violations, and you could get
hit with it repeatedly. As long as you have a provision in the lease
agreement that tenants must reimburse you for any of these, you are set --
except there will probably be a court fight to get the money. On the other
hand, if the association decides that having tenants per se is the nuisance
and it's an ongoing nuisance, they might fine you every day until the
situation changes. Then it's a matter of where you live. In my state, the
fines mean nothing because they cannot take them out of a person's dues and
cannot foreclose over them. They cannot collect without taking the owner to
court, and a small claims court will throw it out if there is no harm done
to the community. It's possible that things are entirely different where
you live.

Some states are tenant friendly and some are not. The ones that are tenant
friendly also tend to favor owners over associations, so it may even out.
And if you don't live in my state, I wouldn't have a clue anyway.