I’m sorry for my previous answer but I started going over the emails from the top and didn’t notice that I have two messages from you.
It’s a tough one… I personally would bring the association / by-laws issue to your attention, especially before attempting any installation that alters the exterior of the property, but that’s me. I know that in most cases any changes, even purely aesthetic, to the exterior finishes (including roof) in communities where the association is responsible for maintaining them are forbidden.
I’m pretty sure that the heating contractor is not required to know the by-laws of your particular community but it is a common knowledge that condominiums, townhomes, and some single family home subdivisions that have associations require uniformity… if there’s one hole in one unit’s wall, there can only be one hole in another unit’s wall.
Maybe he didn’t know that there are any by-laws / association, and / or he assumed that if you are asking him to install a new high efficiency heating system, you did some research on your own.
One solution is to install an electric water heater, which doesn’t require any venting, and reuse existing chimney as a chute / housing for the PVC vent pipe from your new furnace. That’s assuming that the contractor will be able to feed that PVC pipe inside the existing metal pipe (sometimes there are offsets concealed inside walls or ceiling.
Before he does that I would ask the association about him accessing the roof and working on the chimney pipe. They may say no… I was told NO (while working as a home inspector) to access association regulated roofs several times.
For an electric water heater you will require 220V power supply line. If the electrical panel is very close and there is enough room inside it to install an extra circuit breaker (same dimensions as your AC breaker / it takes two regular spaces), this shouldn’t be difficult.
There’s also an issue of condensation (not inside the PVC pipe which is normal) between the exterior of that PVC pipe and the old chimney / vent pipe. This would depend on your climate and configuration of the venting system. If you experience freezing temperatures during the winter, the condensation forming inside the metal vent pipe might flow back into the house, drip onto your appliances, floor, etc. So the HVAC guy needs to figure out how to prevent that from happening.
Any other water heaters, even the high efficiency ones, require a dedicated venting system / cannot be vented using the same PVC pipe as the furnace – more holes required :-(.
Please let me know if you have any additional questions. Good luck with your association.
Happy New Year Shelly!