Today, we are bringing back our old series UrbanTurf Reader Asks where we answer a question from one of our readers. In this installment, a reader wonders how a rental cap might affect condo sales in her building.
Question: My condo building (I'm the board president) caps the number of rentals in the building at a one-third of the units. Every year at our annual meeting, the absentee owners start agitating about lifting/removing the cap. I always tell them if they want to do that, they can do the legwork to get a bylaw amendment passed. What's the general consensus about how rental caps affect condo sales? I've seen both sides (it hinders sales and helps sales) and I'm just wondering if there is any sort of general thinking on it.
Answer: Most lenders need 51% owner occupancy in a building. Anything below 51% will be a problem for warrantability. This applies for primary purchases of 10% down and less. So, a building can increase to 49% renters without issue. If they go above that, they will limit people getting a loan that are investors or second homes or low down payment primary residents.
If you would like to submit a question for UrbanTurf Reader Asks, send an email to email@example.com.
This article originally published at https://dc.urbanturf.com/articles/blog/urbanturf_reader_asks_how_do_rental_caps_affect_condo_sales/20536.
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