Protect General Scott Owners!
A) Sign this petition and direct the GS board to convene a special meeting to increase the rental cap in the GS by-laws, and
B) Once the Special Meeting is called, vote YES to change the by-laws to increase the rental cap to 49 percent.An amendment to the by-laws requires at least 67 percent of owners to vote in favor of the change.
Under the GS By-laws no more than 40 percent (72 of 181 units) may be “Rental/Investor-owned” in the building. For some time, a growing number of GS owners have raised concerns about the 40 percent cap, which has created an unsustainable backlog on the rental waitlist. As of the June 24, 2015 board meeting, 25 owners were waiting to receive Board permission to rent their units. The two owners who received board approval to rent their units in July were on the waitlist for 11 months.
The 40 percent cap specified by the By-laws is an outdated and arbitrary number that relates to the original lender's requirements--when the Condo Association was formed. Today, FHA regulations state that up to 50 percent of units can be “Rental/Investor-owned” for an association to stay FHA-compliant, thereby allowing potential owners to qualify for FHA loans.
Financial Losses Suffered by Owners as a Result of the 40 Percent Cap:
The current situation is harmful to the entire GS community in the following ways:
- Units are selling at a lower average price than neighborhood comparisons. Over the last two years, 27 units have been sold in the GS with an average price per square foot of$485. When compared with four different real estate resource for DuPont Circle and Logan Circle, GS owners are selling for 20 percent less, per sq. foot. For junior 1BRs, the value per sq. foot is 10 percent lower in the GS compared with junior 1BRs sold in the last 120 days within ¾ of a mile of the building.
- Units are not selling as quickly as owners would like, or at all. Per MRIS listings, since the start of 2014, 30 units in the GS were put on the market (17 percent of the building’s units). Eight units were withdrawn from the market and three are still active.
- Individual owners could lose $10,000 to $25,000 of lost rent and condo fees in one year if the average current wait time on the waitlist remains 11 months. More owners will put their units on (and flood) the market or stop paying their condo dues and throw FHA status into jeopardy.
- The current By-laws tie the hands of all owners in the event of unforeseen life changes. If an occupant-owner is forced to move out of the GS unexpectedly, there is no viable option to rent his or her unit. There are no circumstances in which the GS Board will grant special permission to rent the unit. S/he will either have to let the unit sit empty for a lengthy period or sell it, likely at below market value, to someone who wants to live in the building.
The committee recommends amending the By-laws immediately to increase the rental cap to 49 percent (89 units). Such an amendment would allow the maximum number of owners to rent their units and still ensure the Association maintains FHA compliance. To support this recommendation, we ask owners to do the following:
1) Sign this petition and direct the GS Board to call a special meeting within 45 days to vote on amending the GS By-laws. A special meeting can only be convened if at least 30 percent of owners sign this petition.
2) Attend the special meeting and vote YES to change the by-laws or authorize a YES-vote by proxy (you will receive this proxy once the special meeting is called). Any amendment to the GS By-laws requires 67 percent of owners to vote in favor of the amendment.
Should you have any questions or concerns, please contact building manager Erica Ward or any of the other members of this committee. Emails and phone numbers are below.
Erica Young, Building Manager, 202-462-0500, General.firstname.lastname@example.org
Claudia Hartleben, Unit 614, 847-529-6137, email@example.com
Ben Orbach, Unit 414, 202 247 5184, BenjaminOrbach@hotmail.com
Robert Sabanosh, Unit 416, 202 213-9979, firstname.lastname@example.org
When you sign the petition, please include your unit number in the comment section with your signature. Thank you for helping to protect the current and future interests of the General Scott community!