Is there a way to prevent renters in an HOA?

We have an association of 95 single family homes around a nine-hole golf course in IL. Recently, a couple of our homeowners who have moved from the area have begun renting their houses out because they are unable to sell in today's market. Other homeowners have asked if we can prevent the homes from being rented. Our bylaws and CC&Rs are silent on the matter. Any suggestions?

I guess I will just say that I don't get it. I suppose that some people would rather have a couple of foreclosures in the neighborhood over rentals. I will say that I don't see how that makes a neighborhood better.

I think you are much better focusing your energy on making sure the homes stay in compliance with the neighborhood standards. When banks write mortgages they are concerned with making sure that the house really is worth what the documents say. And mortgages are written all the time for houses in areas with a lot of rentals.

If you choose to focus on maintaining your neighborhood and its value, you will naturally reduce the number of renters in it. And the houses that are rented will command a better price.

Gary,
Put the shoe on the other foot--yours. You have to moove for a couple of years due to a job transfer or having to take care of someone but you really love your house and area. You want to come back OR you want to sell and cannot. What will you do to pay the bills? RENT IT OUT!!!

GaryT - "homeowners have asked" which means you and the Board are in the position of educating them on the pros and cons. Not sure what your opinion is on the matter, you don't say. My belief is there are cons in restricting owners from renting in this or any market. Reason is that it will force some to sell perhaps at a loss. This hurts the overall value of the community because of the comps that are looked at in the appraisal process. But that too many rentals is not a good thing either. Agree with focusing more on providing renters the cc&r's. The owners of the homes, rented or not rented, are always the primary contact on the hook to make sure that all those residing in the home comply with the rules and regs. It is not appropriate that the association Board deal direct with the renter. Instead it's the owner that is ultimately responsible.

Seeing that I have dealt with anti renter associations and I have 2 rentals, I always want to know--who came up with the concept that all renters are BAD? There are bad ones and very good ones. There are really bad owners and really good ones. So explain to me why a ban should be on renters as a general policy. I have heard every and all excuses why they are bad but I never hear any valid good reasons.

the same people who came up with "people under 54/40/18/10 are always noisy" and "this breed of dog is a killer" and "those people ruin neighborhoods".

basically, bigots who use stereotypes and subjective opinions to judge things, rather than facts, behaviors/actions, and objective data.

I would highly recommend that you point out to the owners asking that what they want to do would harm the people they used to call friends. And that the issue would probably cause a lot of strife and could easily cause more damage then any number of rentals. If they insist, then point out that it will take 75% of the people saying yes to such a change. Not 75% of those bothering to vote, but 75% of the total homes owned. Most CC&R changes require that of the total homes, not of a quorum setting the bar extremely high.

As for renters not taking care of things as well as an owner, in my opinion, the problem is more often the landlord then the tenant. I can say with clarity that the house I used to rent would have been much better off if my landlord had let me improve the place at her cost. As just one example, some painting needed done and she would only agree to pay for primer.

I thought it was just her, then discovered that many a landlord seem only interested in maximizing the immediate return. But you should focus on keeping the homes looking the best they can. If the homes are well maintained, then the values will remain. The value of a home is determined by how much similar homes in the area are selling for. A well kept home generally sells for more. And if you always focus on maintaining your neighborhood the rest will take care of itself.

I am convinced that an empty home is a bigger drain on value then a rented home. In fact, I can't think of a single place where I have seen a house that looked better empty then occupied. Not saying it never happens, but...

KirkWI,

I agree with you. Generalizations are never a good thing. Renters get a bad name because of a few. We have some owners here who let their property go to pot until they reeive a notice and then may or may not address the problem. I've rented only a few times in my life but when I did the property was usually cleaner and in better repair than when I moved in. We have some owners here in our HOA who bad mouth renters. I had a couple who rented and lived next door to me who were great and finally moved out and bought their own home because the owner refused to do anything about a roof leak.

Gary I believe a better way to go is to put in place protections to protect your Association from bad renters and landlords. I believe it was Donna that mentioned she had property in an Association that required an owner to occupy the home for two years before it could be rented to prevent speculators. This of course would not affect the houses currently for rent but could be phased in; I would however have a hardship provision where an owner could apply for a variance on this as emergencies do happen.

While the homeowner is ultimately responsible for their tenant's actions, you can add some protections by requiring certain language in the lease or as an addendum to the lease. Some of the things I would suggest in no particular order are:

1. Make the minimum rental term at least 6 months preferably a year.
2. Add something to the effect of if the homeowner becomes delinquent with their assessments then the Association can collect them and any past due amounts directly from the tenant and the owner must credit the money paid by the tenant as rent. In other words if your monthly assessment is $150.00 and the H/O is delinquent then the BOD collects the $150.00 from the tenant directly. When the tenant sends the owner his rent minus the $150.00 the owner must credit it as if the tenant paid him in full.
3. I would also include language that if you have amenities (pool, tennis court etc.) the owner either assigns the amenity to the tenant and cannot use it for the term of the rental or keeps it for their self and the tenant can't use it.
4. Give the Association the power to initiate eviction actions against problem tenants with the cost to be born by the homeowner.

And finally when you have the whole thing drafted have it looked over by an attorney to make sure it doesn't violate the landlord - tenant law in your state and adequately protects your Association as much as possible.

Donna I believe most of these people are flashing back to when they were renters. Almost everybody had a friend whose apartment was party central. Now 98% of the people in those building were decent hard working people who treated the property well but they suffered at the hands of the 2%. And a lot of it is perception; people are inundated with negative images of rentals, whether it may be stories of slumlords or the news reporting the number of other problems prevalent in rental properties. Rarely do people who get busted selling or manufacturing drugs from the safety of their own home, it's almost always reported as a rental property.

Also recognize that this isn't necessarily an "all or nothing" issue. Our community amended our CCRs to allow no more than 5% of the current homes to be rented at any given time.

The reason for doing this is that the owners felt that a community where a large percentage of homes are rentals takes on a different character than one that is primarily occupied by owners.

While this may sound like a logistical nightmare, with the guidance of our experienced HOA attorney we have been able to (a) get the 2/3 majority required to pass the amendment, and (b) manage the process effectively and efficiently thusfar.