A hot topic in homeowners associations is renting out your home in the neighborhood. The primary concern for homeowners is that too many rentals will lower the quality of the HOA community, causing broken rules, problems in the neighborhood, and safety issues. While some HOAs may restrict rentals completely, others set a rental cap. Most HOAs have a rental policy that can be found in the governing documents.
Whether it’s for a year or more, or a short-term rental through Airbnb or VRBO, many associations have rental caps that affect the rental process. Homeowner associations can limit the number of rentals based on a rental cap. For example, the CC&Rs may state that only 25% of the homes in the association can be rentals. Once you reach that rental cap, there are no more rentals allowed in the HOA community. You can have a waiting list for people to be able to rent their home once there's an opening.
Because different associations have different rules, some associations may have a rental cap, but if it’s a family member living in the unit, it doesn’t count towards the cap. According to some association’s governing documents, if you own a home or unit in a condominium association, you can have your children or parents living in it and it’s not technically a rental. The flipside of this scenario is that some HOAs require the person living in your rented unit to actually be on the deed - and they have to prove it.
Then there's the aspect of a short-term rental. More homeowners are choosing to rent their homes through sites such as Airbnb or VRBO as a convenient, low-cost way to earn additional income; however, the popularity of short-term rentals is raising concerns in associations and even opening them up to liabilities.
The main problem with short term rentals in an HOA is that guests automatically have free reign within the HOA and no long-term interest in the community. They may not be aware of or understand that there are HOA rules – they might not even be aware the rental is a part of an association.
There’s also a safety aspect to consider for permanent residents of the association. For example, in gated communities, renters must be given the gate code while staying, but this becomes a security concern because typically the Board or management only changes the gate code every six to 12 months.
Most associations can put into their rules that rentals cannot be less than 30 days, so that can help combat the issue of short-term rentals.
Keep Everyone Informed
Make sure you comply with the governing documents—the rules and regulations, bylaws and CC&Rs – of your homeowners association. They may contain specific requirements for non-resident owners who lease their units. Also, make sure your renters have a copy and understand the rules. Once the lease is signed give a copy to the manager or an HOA board member. Associations usually have a clear policy for renters. The more information you provide about your renters, the more successful they will be in your community.
Make Renters Feel Welcome
If you have renters in your community, they’re entitled to all the privileges of Association membership except voting and attending Board meetings. They’re an important part of your homeowners association and welcoming them could create a more positive environment. Sending a welcome letter, email or even a phone call from an HOA board member are all great ways that make an impression and open the lines of communication. Be an advocate for your renters with the Association. Make sure they have access to the recreational and parking areas and that they have the keys and passes they need. Also provide them with the name and phone number of your HOA manager.
So, can your homeowners association prevent you from renting your home out? Yes. Many homeowners worry that allowing renters in the HOA will cause safety issues because both short-term and long-term renters won’t know the rules or won’t have buy-in to follow them. But remember, each association has different rules, so it’s important that you read and understand your governing documents– and that your renters do too.