can CC&R limit the number of rental units

I am on the unpopular side of this issue on here. So it's best that I play the "Devil's Advocate" on this one. I am NOT saying I don't disagree with limiting rental property, my opininion is that it can't really be enforced.

My informed stand on the issue (NOT A LAWYER) is that unless the HOA actually owns the house/condo, they can not restrict what an owner does with that property. It may own and control the land around/under it but not what's on it as far as rights. A mortgage/bank company can put on renting restrictions as part of their loan restrictions but a HOA typically can't. Not to say it can't be written into the HOA's documentation. It's just may be one of those rules unenforceable.

If your going limit something then you need to make it punishable. What punishment will there be on a owner who at 11% rents out their property? How do you know the rental rate in the first place? Does a homeowner have to notify anyone they are using their home as rental property? Where is the documentation that shows an approval to rent? Are there going to be exceptions if there is a genuine hardship issue?

I find the best solution to the rental issue isn't limiting rentals. It is using the tools available to the HOA to enforce the rules on the renter through the owner. Hold the owner's feet to the ground for any violations of their tenant. It's their investment property and they should care how it is being treated. The HOA shouldn't be babysitters to their property but they should know the owner's contact information.

You have to keep in mind that once a property is rented, there are RENTER's rights that even the owner of the property can't violate. This means a owner has to give proper eviction notice which can take 20 days to over a year to evict a tenant. NOTHING the HOA can do about it nor the owner. It's a contract between the owner and tenant.

I point these issues out because you have to think beyond what is in writing. Putting restrictions in place is a ripple effect. Think beyond the documentation and into the other laws beyond the HOA's. I'd recommend a good call to an attorney just for some general advice before proceeding in general...

MS9:

As part of JanetB2's response she said:n one side of the issue you have financial institutions who do not like to give loans for HOA’s with high rentals.

She is correct as I have been told once a community has 30% rentals, mortgage companies will be very relunctant to write a mortgage. Don't know for sure how true it is, but makes sense.
The management company for the HOA knows which homes are being rented, and can track the percentage.
Of 167 units in our community, we have 17 rentals. That is 17 too many, because renters don't have to care, and most don't, because they can simply move on.
The unfortunate loser is the surrounding homeowner who purchased their house to make it a home, and will see it devalue as more, and more renters move in.

Jim