The Adverse Effect of Rentals on Condo Property Values

A great area of concern for many condominium communities are rental units. Tampa condo association management companies are charged with the task of preserving and increasing the property values of the community. However, a large number of rentals in a community can have an adverse effect on property values because of federal mortgage requirements and the impact on the quality of life of other community members.


An over-saturation of rentals within a community can have a negative affect on property values. The Federal Housing Administration (FHA) requires condominium communities to be at least 50% owner occupied in order to qualify for their mortgage programs. FHA-insured mortgages account for 30-40% of condominium mortgages. If units are unable to be sold because the mortgages that prospective buyers need are not available to them, property values tend to fall.

In order for a condo community to qualify for FHA-insured mortgages, the following rental restrictions must be met:

1. All rental leases must be in writing and subject to the rental restrictions of the association.

2. The condominium association may request and receive a copy of the rental agreement.

3. The association may request the name(s) of all tenants who will occupy the unit.

4. Unit owners are prohibited from offering lease agreements for an initial term of less than 30 days.

5. The condominium association has the power to establish a maximum allowable lease term.

6. The condominium association may establish a maximum number of rental units within the project. However, the percentage of rental units may not exceed the FHA owner-occupancy requirements.

It is important to note that an association or Tampa condo association management company may not require prospective tenants to be “vetted” or approved by the association or its agents. Such provisions may jeopardize the community’s ability to qualify for FHA financing.


The transitory lifestyle of tenants can affect condo owners in many ways. Frequent move-ins and move-outs generally result in an increase in noise and damage to the community, and can create an environment of impermanence, which can lead to owners feeling as if they are not living in a stable community. In addition, the perception that owners take better care of their units than renters do is common and, unfortunately, in many cases true. Furthermore, there is generally a higher incidence of violation of CC&Rs by tenants, including noise disturbances, unlawful storage or disposal of items, and illegal parking.

For information on our condo association management services in Tampa, please call us at (813) 968-5665, or submit our proposal request form.

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