Leasing

The following information on the leasing of Jupiter Bay condominium units by owners and rental agents is provided:

    »  Jupiter Bay Condominium Association's Rental Policy
    »  Condominium Unit Rentals (Frequency, Times & Length)
    »  Agencies that Rent Units for Jupiter Bay Owners
    »  Parking Permit Processing
    »  Condominium Unit Sales
    »  Condominium Ownership
    »  Conclusions

Tenant's Rights

FL Statute 718.106(4) says “When a unit is leased, a tenant shall have all use rights in the association property and those common elements otherwise readily available for use generally by unit owners and the unit owner shall not have such rights except as a guest, unless such rights are waived in writing by the tenant. Nothing in this subsection shall interfere with the access rights of the unit owner as a landlord pursuant to chapter 83. The association shall have the right to adopt rules to prohibit dual usage by a unit owner and a tenant of association property and common elements otherwise readily available for use generally by unit owners.

Information is based on a full year of 2018 leasing and ownership data.

Introduction

For the past 18 years, the Jupiter Bay Condominium Association’s receptionist has been tracking the issuance of Parking Permits and related leases on an Excel spreadsheet. The data includes date, permit #, unit, renter’s/guest’s name, vehicle identification (make, model, license # & state), unit owner’s name, rental agent and lease period.

In 2008, 2010 and 2013 this permit/lease data was analyzed to determine vehicle parking and unit leasing information to help Association management:

  • Understand the composition of the residents and vehicle parking, and
  • Provide requested data to prospective owners, real estate agents and mortgage lenders.

This report uses a full year of 2018 leasing data and QuickBooks unit ownership data to update permit/leasing/sales information and provide perspective on demographic changes occurring within the Jupiter Bay community.

Jupiter Bay's Rental Restrictions

Jupiter Bay is classified under Florida Statute 509 as a “Transient public lodging establishment” because units are rented to guests more than three times in a calendar year for periods of less than 30 days or 1 calendar month, whichever is less.

  • Parking permits are required for all vehicles that park overnight on association property.
  • Restrictions, applicable to both renters and owners, include the following (from Section #10 of Jupiter Bay’s Declaration):
    • 10.1 – “The number of persons occupying a unit will at all times be reasonably related to the size of the unit.” Occupancy is limited to 4 persons for a one-bedroom unit and 6 persons for a two-bedroom unit.
    • 10.4 – “No commercial vehicles, non-passenger vans, motorcycles, limousines, large or modified pick-up trucks, agricultural vehicles, dune buggies, trailers, busses, or boats shall be used, operated, stored or parked in any parking area, street, or other portion of the condominium property” except for short-term delivery and contractor vehicles (during normal business hours).
    • 10.9 – “Domestic household pets not to exceed 20 pounds are permitted” but when outside the unit, they must be on a leash or under the owner’s direct control.
  •  The West C Association has several additional restrictions:
    • Rentals must be for at least 30 days except for several holiday rental exceptions.
    • All rentals must be reviewed and approved in advance by the Association.
    • Unit sales require a $100 transfer fee, 1st time renters of a unit are charged a $75 processing fee, and owner Guests not residing with the owner must pay a $25 fee.

Leasing of Jupiter Bay's Condominium Units

• Paragraph 10.1 of the Association’s Declaration says that “Leasing or renting of a condominium unit by a Unit Owner is permitted.” Consequently, Jupiter Bay has few restrictions and many rentals.

• A 2002 Arbitrator Ruling said that the Association can enforce occupancy limits and require that leases be in writing and filed with the Association prior to occupancy by the tenant, not less than 3 business days in advance of the intended occupancy.

• Because of Jupiter Bay's liberal rental policy, it is classified under Florida Statute 509 as a “Transient public lodging establishment”.  This definition applies to any unit, group of units, dwelling, building, or group of buildings within a single complex of buildings which is rented to guests more than three times in a calendar year for periods of less than 30 days or 1 calendar month, whichever is less, or which is advertised or held out to the public as a place regularly rented to guests.

• The Jupiter Bay Condominium Association does not lease units. Owners who lease their units do it themselves or work through a rental agency.

• 23 different rental agencies were used by JB owners in 2018. No agent is affiliated with or endorsed by the Association.

• Services provided by these agents vary from providing tenants to property management and unit remodeling/upgrading.

Important Information Regarding Rentals

• A Guest/Lease Registration Form must be completed for each non-owner unit occupancy and submitted to the Association Office.

• Per FL Statute 718.106 (4), When a unit is leased, a tenant has all use rights in the association property and those common elements otherwise readily available for use generally by unit owners, and the unit owner forfeits those rights except as a guest.

• Per FL Statute 718.116(11)a, If a unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due the association, the association can demand that the tenant pay the association the rental payments due and continue such payments until all of the owner’s monetary obligations are satisfied. Delinquency for rental purposes is defined as overdue payments for late fees, interest, attorney fees and assessments as of the rental application date.

• Per FL Statute 718.303(4), The Association has the right to deny delinquent owners and their renters/guests use of common facilities and services including swimming pools, tennis courts, etc.  However, no tenant shall be denied access to any available franchised or licensed cable television service.

• Condominiums rented or leased for 6 months or less in Palm Beach County, require collection of a Tourist Development Tax equal to 6% of the total taxable rental receipts. Failure to collect and pay this tax and the 7% sales tax on unit rentals is a theft of state funds and carries felony charges.

Condominium Unit Rentals (2018)

Condominium Ownership/Usage

  • 225 condominium owners (62.7%) rented their unit(s) at least once in 2018. This is up from 199 owners (55.4%) in 2013 (5 years earlier).
  • 134 condominium owners (37.3%) did not rent their units at all in 2018.
  • Approximately 123 condominiums (34%) are primarily owned as investments but may have some personal use.
    • 108 – Rented 5 times or more per year
    • 15 – Annual Rentals

Overall Number of Rentals

Quantity of Rentals

  • 45 units were only rented once in 2018. (15 of these were annual rentals.)
  • Most leased units were rented once (20%) or twice (12.9%).
  • 38.2% of the units were rented 3, 4, 5 or 6 times. Approximately 9.5% per time period.
  • 30 units were rented ten times or more in 2018. Only 19 units were rented this often in 2013, showing a significant increase in short-term rentals.
  • 3 owners hold the record for number of rentals. One Villa unit was rented 32 times by the unit owner, one East unit 30 times by the owner, and one West unit 24 times by the owner.

Agencies that Rent Jupiter Bay Units

Agency Rentals at Jupiter Bay

  •  Jupiter Bay homeowners used 23 different rental agencies in 2018, 5 more than they used in 2013.  Jupiter Bay Resort Rentals (JBR) and Jupiter Lighthouse Realty (JLR) accounted for 45.5% and 6.6% respectively of rentals.
  • 104 owners used JBR in 2018, and 33 used JLR. Owner’s use of these agencies has not increased significantly from 2013.
  • In the past 5 years Owner and Owner Guest rentals have increased considerably. 47 owners rented their units themselves in 2018, and 54 owners rented to guests, most of which appear to be unrelated to them.

Principal Rental Agencies Used

Total Days of Unit Rentals

  • This chart shows days rented by agency for the top 8 agencies used in 2018 plus days rented by owners (to guests or others).
  • The remaining 15 agencies had under 500 days of Jupiter Bay rentals.
  • Jupiter Bay units were rented for 41,441 days in 2018, 1,073 more than 2013 and 14,869 more than in 2010.
  • JBR led with 17,056 days rented, followed by Owner rentals (8,240 days), JLR with 5,129 days rented and 3,535 days rented to Guests of Owners.

 

Agency Rentals per Rented Unit

Days Rented per Rented Unit

  • The 5 owners using Onshore Properties averaged 348 rental days for their unit whereas the 3 owners using Turnkey averaged 7 rental days.
  • JBR provided each of its condo owners 164 rental days (over 5 months) average. Owners renting their own units exceeded this by 11 days average.
  • The number of days that Owners rented their own unit increased by 863 (11.7%) from 2013.
  • 64 owners used more than one rental agency in 2018, up from 15 in 2013.

Rental Agents by Building

Rental Agent Usage

  • Rental agencies were used by 104 West owners, 73 East owners and 11 Villa owners.
  • 46 West owners, 43 East owners and 12 Villa owners did their own rentals.
  • Only 4 agencies (JBR, JLR, Illustrated & Poshpadz) rented in all 3 areas (East, West and Villas).
  • 9 agencies only rented in the West: Keyes, Re/Max, Mainsail, Coastal Properties, Onshore, PowerNet, Kolodney, Donohue & Luxury).

Parking Permits & Leases

Monthly Permits/Leases

  • 2,305 parking permits and 1,189 leases were processed through the Association's Office in 2018.
  • Over 210 parking permits per month (approximately 8 per workday) were issued from December through May 2018.
  • Most leases were processed in January (209 leases) and December (133 leases).
  • September is the slowest month, with 62 permits and 29 leases.

Tenants Drive Parking Permit Activities

Leases Only Accounted for 52% of Permits

  •  1,116 parking permits were issued for reasons other than a new lease.
  • 2/3 of these non-lease parking permits were issued for reasons shown here.
  • Tenants were issued more of these non-lease parking permits than Owners, 399 versus 275.
  • Note the number of parking permits issued to Tenants with 2, 3 or 4 cars (237) and the number of permits issued to Tenant’s Guests (125).

Purchasers of Jupiter Bay Condos

Most Units are being Purchased by Investors

 This chart excludes multiple sales, only considering the final owner’s condo usageInvestor is defined as an owner who rents their unit 5 or more times a year or has annual rentals.

  • Most new Jupiter Bay condo owners are either Investors or do not rent their unit at all.
  • Over the past 5 years, 4 Units were purchased by Foreigners, 3 of whom were investors.  2 of the Foreigners were Canadian.

Home Addresses of Jupiter Bay Owners

JB Owners Represent 30 of the 50 States

  • 10 or more owners are from each of the listed states.
  • The “Other” category includes 23 states.
  • The highest percentage (35.7%) of Owners have Florida primary addresses.
  • 31% of Jupiter Bay Owners list their primary address as New York or New Jersey.
  • Foreign unit owners include Canada (8), England (3), Argentina (1), Austria (1), Belgium (1), and France (1).

Conclusion

1.  Except for West C building, Jupiter Bay has extremely lax rental policies, restricting only size of pets, type of vehicles and number of unit occupants. No lease approvals nor transfer fees (except West C) are required.

2.  The number of units rented in all buildings except West C has increased over the last 5 years, from 55.4% to 62.7%.

3.  The average number of rentals per unit has increased (30 units rented 10 times or more) and rental length has decreased (223 rentals less than a week) trending toward a hoteling community.

4.  The number of Owner and Guest of Owner rentals is increasing, bypassing the local brick-and-mortar agencies. These rentals were 20.9% and 24.0% of total 2018 rentals, respectively.

5.  Jupiter Bay is becoming an investor/tenant community instead of a primary/secondary home community. Based on the current trend, number of Investor-owned units will exceed number of non-rented units in 2019.

Association & West Building-by-Building Comparison

Condominium Usage by Association

  • This chart shows all 8 Jupiter Bay associations.
  • The West units collectively have approximately 10% fewer rentals than the Villas and East.
  •  Building B was the most rented West building in 2018 (68.8%), and building C, which has the most stringent rental rules, was the least rented (40.6%).
  • The number of units rented in 7 of the 8 associations has increased over the last 5 years.  The number of West C rentals has not changed.

Length of Condo Unit Rentals

Days Rented per Lease

  •  The most typical rental period in 2018 was for 1 - 2 weeks (32.6% of rentals) followed by 4 - 6 weeks (20.7% of rentals)
  • 223 rentals (18.8% of total rentals) were for less than a week.  Five years ago (2013) only 89 rentals were for less than a week.
  • 37.7% of the Villa rentals were for less than a week. (This was driven by one Owner with 24 4 to 6-day rentals.)
  • 15 rentals were for one year or more.

Rental by Owner

  • With the increase of online condo rental companies, such as Vrbo, Airbnb, HomeToGo, RentByOwner and others, more Jupiter Bay owners are renting their own units.
  • In 2018, 21% of Jupiter Bay condo rentals were owner-managed, saving these owners the typical 15 to 20% local agency commission.
  • Although, this provides extra net income, it places additional responsibility and tasks on the condominium owner including:
    • Tenant Qualification
    • Scheduling
    • Lease execution
    • Fee collection
    • Tax payments
    • Record keeping/retention
    • Post-rental inspection
    • Cleaning
  • Some of these tasks can be performed by the online condo-rental company.
  • Fees include security deposit, rental, cleaning and taxes.  Both county and state taxes must be collected on any rental of six months or less and forwarded, in a timely manner, to the respective government department.

Rental Agencies Added / Deleted

Agencies Added since 2013 

  • FPB Investment Properties
  • Bea Sallabi Real Estate
  • Poshpadz Luxury Properties
  • Premier Brokers
  • Waterfront Realty
  • Turnkey Vacation Rentals
  • JB A101 LLC
  • Keyes Company
  • JB Vacation Properties
  • Coastal Properties Group
  • Donohue Real Estate
  • Luxury Real Estate

Agencies Not Leasing in 2018

  • Siebrecht
  • Weichert
  • Jeswick
  • MZ Rentals
  • Treasure Coast
  • JT Brokers
  • MLA FL Properties

Agency Rentals per Lease

Average Lease Period

  • The average 2018 lease was for 35 days.
  • In general Turnkey, Poshpadz, Bea Sallabi and Coastal Properties had very short leases (averaging under 20 days).
  • Onshore and PowerNet had long leases:
Onshore PowerNet
125 193 Average Lease Length
9 3 # of Rentals
  • JLR had longer leases than JBR, 65 days versus 32 days.

Annual Jupiter Bay Rentals

# of Rentals is Increasing

  • Jupiter Bay had 1,189 rentals in 2018, 255 more than 2013.
  • Owner and Guest of Owner rentals are up significantly, 157 (180%) and 56 (127%) respectively.
  • Jupiter Bay’s two major rental agencies experienced a slight decline in number of rentals:
    • JBR – 6.6% decline
    • JLR – 26.8 % decline
  • The number of rentals at Jupiter Bay is increasing every year.  They’re up 50% since 2008.

Annual Number of Parking Permits

More Parking Permits were Issued each Year

  •  2,305 parking permits were issued by the Association in 2018, 517 more than 2013 and 914 more than 2010.
  • The increase is driven by the increase in condominium rentals, shorter rentals, and additional 2nd and 3rd car registrations.

 

Jupiter Bay Condo Sales are Brisk

Annual # of Condo Sales are Consistent

  • As of March 2019, 19 owners own more than one condominium unit - 16 own 2 units and 3 own 3 units. This has not changed significantly during the past 5 years.
  • Sales over the past 5 years average 25 units per year.
  • Over this period 16 units sold twice, and one sold 3 times.
  • Sales per year varied from 3% to 9% of total units within the area (East, Villas or West).

 

Condominium Usage (10-Year Period)

Investor-owned Almost equals Not-Rented

  •  Rentals of existing units is increasing, and more investors are purchasing units.
  • In 2008, 40.7% of units were not rented, this dropped to 37.3% by 2018.
  • In 2008, 21.7% of units were used as investments, this increased to 34.3% by 2008.
  • It’s unknown how many of the 236 non-investor owner units are used as primary residences and how many as 2nd homes.
  • However, if the 134 are considered primary residences, then 102 units would be 2nd homes.

128 Jupiter Bay Owners have Florida Addresses

35.7% of Owners are Floridians

  • Of the 134 Owners who didn’t rent their units at all in 2018, 72 of them list their Jupiter Bay address as primary.
  • 29 Owners live in elsewhere in Jupiter, including zip codes 33477 (19) and 33458 (10) but lease units in Jupiter Bay.
  • The “Other FL” category includes owners from 16 Florida zip codes.

Questions

1.  What kind of community do we want Jupiter Bay to be?

  • A primary/secondary home community where owners can enjoy the Florida lifestyle, know their neighbors, build friendships, and socialize or
  • An Investor-owned transient condominium community where residents are constantly changing, and absentee landlords maximize income from as many rentals as possible.

2.  Should all 8 associations restrict rental periods, collect transfer fees and approve leases (like the C West building)? Could transfer fees help offset the cost of issuing parking permits to tenants?

3.  Are one or two rental agencies controlling the selling/buying of Jupiter Bay condos enabling these agencies to sell primarily to Investors?

4.  Will online rental agencies eventually replace the brick-and-mortar agencies that most Owners use today?

5.  Why are so many rentals classified as “guest of Owner”, including some with 5-7 rentals totaling over 100 rented days?