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Subject: How can you limit the amount of renters
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SueK2
(California)

Posts:9


07/02/2019 1:10 PM  
We are a small hoa 25 houses and we have homes already rented. We want to discourage people who buy a house just to rent it. How can we do that? We are in California.
SheliaH
(Indiana)

Posts:2735


07/02/2019 2:17 PM  
You could amend your CCRs to set a percentage and/or require homeowners to live in the house for X number of years (e.g. 2) before they could rent, but you will need homeowner approval (check your documents) and then figure out how to enforce this (how do you keep track of who's a renter or not? People can and do lie).
You don't say how many homes are already rented, but those homeowners would likely object to such rules unless you grandfathered them in (once the house is transferred or sold, they're subject to the updated rules.

We tried amending our CCRs this way and it was a gigantic fail, and because we're a townhouse community, we have A LOT of rentals. As an owner-occupant, I understand your pain, but the best way to address this may be with fair and consistent rules enforcement. You should be able to walk around your community and not be able to tell who's renting or not because everyone's complying with the rules. The renters are often accused of not obeying because they're not permanent residents anyway (so what do they care?) However, bad renters don't fall out of the sky - they exist because of indifferent and just plain greedy owner/landlords who only care that the rent check doesn't bounce.

So, you have to lean very hard on the owners. Everyone should understand as homeowners the rules exist to help maintain property values - no one wants to live next door or across from a pigsty filled with people who don't play well with others. You need to have a policy that spells out how violations are discovered, specific penalties (please check with your association attorney regarding fines), appeal rights, etc. An annual community walk-through can also help identify major problems or at least help you set priorities because some violations may be more bothersome than others. Ask the homeowners for their comments on how rule enforcement should work - it can be easier when people have an opportunity to weigh in on something they'll have to comply with.

GenoS
(Florida)

Posts:3298


07/02/2019 3:15 PM  
Shelia's information is good, Sue. The most important thing, in my opinion, is to amend your documents while the number of rentals is not enough to block an amendment. An owner who rents his property for income will NEVER vote to voluntarily give that up. Enough of them can and will block any amendment that tries to limit their cash cow.
MelissaP1
(Alabama)

Posts:8693


07/02/2019 3:58 PM  
People hate this advice but since the HOA does NOT own the homes, they can't prevent rentals. California does have one of the few laws in regards to rentals but it's pretty new. I don't know all the details and it's only been valid for just a few years.

The best route to take is to make sure if someone rents their home, that it is included in their rental agreement that the tenant must follow the HOA rules. The renter is NOT a member of the HOA. However, doesn't mean they can't have a copy of CC&R's and Articles of Incorporation. Those are PUBLIC documents.

Having this requirement protects ALL parties involved. HOA's have to hold the owner's feet to the ground for tenant's violations. Owner's can't evict a tenant if they aren't required to follow HOA rules. There is also Tenant's rights.

So request owners be aware of this and put it in their agreements.

Former HOA President
RichardP13


Posts:0


07/02/2019 4:39 PM  
Posted By MelissaP1 on 07/02/2019 3:58 PM
California does have one of the few laws in regards to rentals but it's pretty new. I don't know all the details and it's only been valid for just a few years.


Please do some research, I would like to know what the new law is.
JohnC46
(South Carolina)

Posts:8807


07/02/2019 5:29 PM  
Some say if no restrictions on rentals in ones docs, it would take 100% of all owners agreeing to add any. Others say the way to do it is an amendment that allows current owners to rent as long as they own the unit but restrict others and this way it would just need whatever % an amendment takes to pass.

Me, I would be looking for legal advice before trying any restrictions.

Our docs say one cannot rent a unit during their first year of ownership. We believe this discourages investors thus naturally limits rentals.
SteveM9
(Massachusetts)

Posts:3381


07/02/2019 5:54 PM  
Posted By SueK2 on 07/02/2019 1:10 PM
We are a small hoa 25 houses and we have homes already rented. We want to discourage people who buy a house just to rent it. How can we do that? We are in California.




If you want to discourage people, simple say NO RENTALS.

Of course you cant actually enforce it legally, but you only asked about discouraging people from doing it, not preventing them.

While your add it you should add a bunch more en-enforceable rules:
- No cell phones (annoying)
- No toilet paper (better for the planet)
- No sex (too noisy)
- No guests, ever (too noisy)
GenoS
(Florida)

Posts:3298


07/02/2019 7:37 PM  
Posted By MelissaP1 on 07/02/2019 3:58 PM
People hate this advice but since the HOA does NOT own the homes, they can't prevent rentals.

I dislike it because it's not true. It has been done, and tested in courts and held up. In more states than just FL and CA. You do people a disservice with that post (among others).
MelissaP1
(Alabama)

Posts:8693


07/02/2019 8:16 PM  
Does the HOA own the homes? Lawyer told me that a HOA can not limit rentals because they do NOT own the homes. It is up to the mortgage company what you do with their property if you have a mortgage. Even if it's written in the HOA documents doesn't make it "legal". I know of no state that prevents anyone of renting out their home.

Former HOA President
SteveM9
(Massachusetts)

Posts:3381


07/02/2019 8:37 PM  
Yes. Its been done..... Voluntarily.
CathyA3
(Ohio)

Posts:494


07/03/2019 5:32 AM  
Posted By MelissaP1 on 07/02/2019 8:16 PM
Does the HOA own the homes? Lawyer told me that a HOA can not limit rentals because they do NOT own the homes. It is up to the mortgage company what you do with their property if you have a mortgage. Even if it's written in the HOA documents doesn't make it "legal". I know of no state that prevents anyone of renting out their home.




Numerous states have rental restrictions written into the CC&Rs, and many have been upheld in court. (According to my association's attorneys, the restrictions that have not been upheld have often been deemed to be vague and arbitrary, so the actual wording of the amendment is important.) It's legal because it's in the governing documents and because courts have recognized that homeowners in HOAs have a material interest in the actions of other members. If the restriction is there because of an amendment, then it was approved by the necessary majority of owners. Persons who buy in communities with a rental restriction have agreed to abide by this restriction, same as with all the other restrictions in the CC&Rs.

Can anyone *prevent* an owner from renting his home? No. Nor can anyone *prevent* an owner from violating any of the other restrictions that the person agreed to abide by. However, the HOA (in the person of the board of directors) can take legal steps to impose penalties on violators, same as with any other restriction.

And as Sheila noted, if your community doesn't have a rental restriction in place, the obvious thing to do is to enforce the restrictions that you have. It will reduce a lot of the problematic behavior that causes concern.

Personally I think the whole rental situation is a bit contradictory since it is a commercial use of residential property, often in areas that are zoned as strictly residential. Owning rental property is a business, especially in the case of the short-term, airbnb style "rentals" (which I say are not rentals at all, any more than a short hotel stay is a rental). Bona fide renters who have signed leases have different legal rights and responsibilities than folks who check into the Marriott or an airbnb for the weekend do. It sounds like at least some municipalities are starting to recognize this.

GenoS
(Florida)

Posts:3298


07/03/2019 11:51 AM  
Posted By MelissaP1 on 07/02/2019 8:16 PM
Lawyer told me that a HOA can not limit rentals because they do NOT own the homes. It is up to the mortgage company what you do with their property if you have a mortgage. Even if it's written in the HOA documents doesn't make it "legal". I know of no state that prevents anyone of renting out their home.

You need a better lawyer. If you know of no state that prevents anyone of renting out their home, that's because you're deliberately choosing to be ignorant. Just because an owner gets a mortgage from a lender doesn't mean the lender has the final say. There are these things called covenants that "run with the land". If a mortgage lender doesn't like them, they're free to not make the loan.
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