HOA Rental Policy: Setting Clear Rules For Homeowners And Tenants

An HOA rental policy is every homeowners association’s first line of defense against out-of-control rentals. That is why it is important to come up with yours early on.

The Importance of an HOA Rental Policy

A rental policy clearly defines what restrictions your homeowners association has concerning rentals. It lets owners know whether or not they can rent out their homes or units and if there are any limitations attached to rentals.

You might wonder, though, why an HOA rental policy is even necessary in the first place. To understand the reason, you must first understand how homeowners associations work.

A homeowners association is responsible for maintaining the community. That includes performing or hiring someone to perform various tasks such as landscaping, cleaning, maintenance, etc. An HOA does this with the primary goal of preserving property values. And unrestricted rentals can affect property values in a negative way.

When owners are given free rein on rentals, they can basically do whatever they want. They can rent out their home to any number of tenants and for as often as they like. Tenants are also given the freedom to do anything as they please.

You can easily see how this can impact the community as a whole. Owners may feel alarmed because their neighbors keep changing. When there are more strangers in the community than permanent residents, people are less likely to feel secure. When tenants don’t face any consequences for violations, they are more inclined to commit them.

Additionally, tenants tend not to apply the same care to the property and the community as owners would. This can result in poor property maintenance and reckless handling of communal items. Such actions can lower property values in the community.

Can HOAs Even Impose Rental Restrictions?

Homeowners associations should aim to create well-rounded and fair rental restrictions. But, do HOAs even have the authority to do so? After all, if a homeowner wants to rent out their property, should they not be afforded that right?

It depends on your state laws and governing documents. For instance, in California, Civil Code Section 4740 allows associations to place restrictions on rentals. In Florida, condo associations can’t make amendments prohibiting rentals unless the owner consents to the restrictions. In other states, such as Ohio, no statutes exist prohibiting associations from enacting rental restrictions.

Your governing documents should also tell you whether or not your HOA has the power to restrict rentals. Many communities already have an HOA rental policy built into their documents. Others, though, will need to amend their documents to include it. This will usually require a majority vote from the membership.

What Should an HOA Rental Policy Include?

Rental restrictions can differ from one association to another. Some communities have certain needs or requirements that may dictate how they construct their regulations.

Generally, though, you should include the following in your policy:

1. Clear Limitations and Exceptions

Every HOA rental policy should have clear limitations and exceptions. Some associations only allow a certain percentage of homes to be rented at the same time. If that is the case for you, provide a specific number. You can also place conditions for rentals, such as requiring owners to have owned or lived in their property for a number of years before they can rent out their homes.

If you will allow any rule exceptions, such as for those called to serve in the military or for those who have been temporarily transferred for work, make them clear in your policy as well. Do not use vague language; clarify all terms as much as possible. This way, owners can’t find loopholes or dispute the policy.

2. Noncompliance Provisions

It is equally important to enumerate noncompliance provisions. Tenants should acknowledge and abide by the rules of the community. Owners should bear responsibility for the violations their tenants commit. For instance, if a tenant blasts loud music in the middle of the night and violates the HOA’s noise rules, the HOA should levy the fine against the owner.

3. Eviction Rights

If your HOA can evict tenants or force owners to evict their tenants, it is also best to outline that in your HOA rental policy. This will make it clear to everyone from the start that your association does have a right to evict and that you will use that power if need be.

4. Tenant Registration

Homeowners associations should know who the residents are in the community. While you have membership lists for owners, tenants can easily slip under your radar. As such, it is a good idea to require owners to submit the names and contact information of their tenants and guests. To encourage compliance, you can consider banning entry to common areas if a person is unregistered.

5. Enforcement Procedures

Write down in clear terms how you will enforce your HOA rental policy. This includes the notification procedures and how tenants/owners can dispute the violation. If you have a fine schedule, outline it within your policy as well.

Frequently Asked Questions

When it comes to rental restrictions in HOA communities, some questions get asked more than others.

Can the HOA require security deposits?

Most associations do have the ability to require an HOA security deposit, whether according to state laws or their governing documents. The purpose of a security deposit is to cover the cost of any damages inflicted on the property. In the association’s case, if the tenant damages HOA property, the board can simply use the security deposit to pay for the repairs. Typically, the security deposit amount should not be more than a single month’s worth of rent.

Can HOA ask for a copy of the lease?

Yes, homeowners associations can require owners to provide a copy of the lease agreement. Associations do this as a way to keep a record of the tenant and owner’s agreement and information. Additionally, it ensures that a written contract does exist between the two parties.

This can serve as a form of protection for the HOA as well since the lease can include a provision permitting the HOA to garnish the tenant’s rent should the owner default on their dues. If you look for sample HOA rental restrictions, most of them will include this as a requirement.

How to get around HOA rental restrictions?

Rental restrictions exist for a reason — to maintain order in the community and protect property values. As such, homeowners should do their best to adhere to the restrictions in place. But, if they feel that the restrictions are unreasonable or unfair, they can raise the issue to the board. In some cases, they can even take legal action, though this is typically not recommended as the first option.

Essential to Any HOA

At the heart of it, an HOA rental policy is designed to protect the association and its property values. If your community does not have one yet, then you should take the necessary steps to come with one as soon as you can. This way, you can ensure owners feel secure and property values remain high.

Managing a homeowners association can come as a challenge, especially when rentals are involved. Get help today by looking for the best HOA management company in your area using our online directory.

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