Owner Occupied by Adult Children

Our HOA says we cannot rent our unit because we are at the maximum rentals allowed by the CCRs. They are counting 3 units that are occupied by adult children, with the owners living elsewhere, as rentals instead of owner occupied. Nothing in our documents mentions this definition. Can they do this?

What does your HOA's rental restriction say? That will spell out what they can and cannot do.

Some restrictions may have a strict interpretation of the term "rental", such as a unit that is occupied by anyone other than the unit owner. Others may exempt first degree relatives of the owner. But what matters to you is what your HOA has chosen to do.

Can they do it? Yeah, unless you want to go through the time and expense of a lawsuit and take your chances that a judge may agree with you. Associations have rental restrictions in order to preserve the character of the community, preserve property values, and maintain FHA eligibility (lenders won't approve mortgages in communities with too many rentals). Restrictions of this sort are attached to the deed of your home, copies of which you should have received when you bought your home.

(As an aside, when my association was looking into enacting a rental restriction, our lawyer recommended not having numerical limit because owners will be treated differently, since approval to rent your home depends on timing and actions of others. Restrictions of this sort are more vulnerable to court challenges.)

Their recommendations resulted from a review of court cases around the country. Here is what they felt would be most likely to stand up in court:

* First degree relatives (parent, child, sibling) of the unit owner should not be counted as tenants.

* All owners should be entitled to a one-time exemption for up to two years. For example, if you must relocate and can't sell your home, you can rent it for up to two years. However, if the tenant moves out after a year, you can't lease it to a new tenant - you've used your exemption. (Lawyer felt that we shouldn't call it a "hardship" exemption, otherwise we'd be arguing over whether individual cases qualified.)

* Currently leased units should be grandfathered in until the unit is sold.

Even though this is a pretty loose rental cap, the amendment did not pass (over 25% of unit owners were not in favor). Owners may regret this if investors start to target the community. Our CC&Rs already prohibit short-term rentals (less than 6 months), as well as hotel or corporate rentals, and we enforce that. I check the airbnb web site regularly.

Our Covenants say no rentals within the first year of ownership and no rental for 6 months or less. I know of 3 cases where the parents bought the house and their child moved in. As the children were adults and we had no complaints concerning them, we ignored it. We have one case where the child bought the home and her Dad only moved in. Again, no problems so another blind eye.

Overall my HOA believes no complaint, no foul.

Actually when you rent your home, the HOA dues become tax deductible as they count as "maintenance". You can not do this as the owner/main residence. It's NOT tax-deductible. So raising the dues for one's rental property doesn't result in much argument. The renter never pays the dues to the HOA.

My thing is with rental, is unless the HOA owns the home, do not think they need to control if owner rents it out or not. The owner NEEDS to put in their agreement that the renter follows the HOA rules or subject to eviction. (That's not in nor required in most rental agreements/HOA rules). Having that rule protects owner/HOA. That is because the HOA has to hold the feet down of the owner to upkeep/follow the rules.

..... or

incorporate

mom is 1% owner

everyone, especially the attorneys, become(s) very happy

rah rah

HOA

sis boom bah

hooray hooray

HOA

I read it and said that it depends what the OP's rental restriction says. Some restrictions count any non-owner occupants as renters, others do not count first-degree relatives. The OP's board has to enforce whatever flavor of restriction that HOA has. And because boards have to avoid selective enforcement, they can't just enforce when there are problem tenants.

It can be difficult to enforce the stricter restrictions. In my community we've had older residents living in units owned by their adult children as a result of estate planning maneuvering, divorce decrees, etc. None of them involved formal, written leases. Are these rentals or not? You can make a reasonable case either way.