How To Play Nice With The HOA When You Own A Rental

Many people think that you cannot rent a home if it is within an HOA neighborhood. Not only is it allowed, but it is happening more than you think.

There are many benefits for a renter to a property being part of an HOA, but they can cause issues too. 

Let’s start with what an HOA is and what they do for a property.

HOAs have boards made up of homeowners in the neighborhood or complex who are typically elected by all of the homeowners. These board members will set up regular meetings where owners can gather and discuss major decisions and issues with their community. 

In addition to the management of the common areas, homeowner’s associations are also responsible for seeing that its community members follow certain rules and restrictions. These rules will be spelled out in the covenants, conditions, and restrictions, or CC&Rs.

What are CC&Rs? Common Restrictive Covenants 

CC&Rs are just the rules you'll have to follow if you live in that community. Unlike zoning regulations, which are government-imposed requirements on how the land can be used, restrictive covenants are established by HOAs to maintain the attractiveness and value of the property. 

Things like the color of the home, type of fencing, and plants allowed in the front yard are determined in the CC&Rs.

Things to look at before listing your home for rent in an HOA.

Make sure there is no rental cap in the terms of your HOA.

A rental cap is a limit on the number of renters allowed in a condo building, neighborhood or development (also known as owner-occupancy rates). If you own a property with a rental cap and the rental cap has been met, you must add your name to the HOA waiting list before you can rent out your unit.

The landlord is responsible for enforcing the rules, not the HOA

You will need to make sure your new tenant is familiar with the HOA and CC&R’s. You will be responsible for making sure that your tenant is abiding by all of the rules. If they do not, the HOA will be contacting you, not them. 

Making a review of the HOA and CC&R’s part of the lease signing will eliminate confusion with the renters. 

Are you going to pass the cost of the HOA fees on to the Tenants? The lease needs to clearly state who is going to pay that cost each month.

One way to ease some HOA stress is to take care of the lawncare within the lease. By supplying the yard maintenance you will know that the yard is being kept to the HOA standards.

Limits of HOA power 

The HOA has to abide by all of the same Fair Housing Act rules as well as any State Landlord/Tenant laws. The HOA cannot discriminate or limit who the landlord can rent to. 

According to Realtor.com, there are some things that an HOA can and cannot do. That might not save you from some of the potential antics of an HOA board.

“But there's a reason that a stigma exists against homeowners associations: Board members on a power trip can institute and enforce some ridiculous restrictions. Ridiculous, like "restricting the color of trampoline covers" ridiculous.”

It isn’t just about monitoring your yard and the color of your front door. 

Some renters WANT to live in an HOA

Your renters may be thrilled that there is an HOA. Knowing that there are clear cut rules to the neighborhood means that quality and standards are maintained

Not having to be responsible for all of the common area upkeep could be a selling point when courting renters. Amenities may make the fees worth it to some renters who want things always neat and tidy around the neighborhood. 

Do not discount using a home within an HOA neighborhood as a great rental. Do think about getting professional property management envolved to be sure all of the T’s are crossed and I’s are dotted.