limiting # of rentals in an HOA

Started by ValerieC • 4 replies • 1708 views

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ValerieC (North Carolina)
Posts: 25

Posted:

What are the ramifications of limiting the % of renters in a community of single family homes. My HOA is in North Carolina. Is there a way to do so, a good reason to do so, and dangers of doing so?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is probably our #1 discussed topic on here. Please review some of the older posts here. There are plenty.

The debate if a HOA can limit rentals does vary in each state. California being the only one of recent with any kind of real limiting powers. That only happened in the last year and doesn't effect homes prior to that.

Since a HOA does NOT own the property they can not put rental restrictions on the properties. They can not evict tenants either. They can hold the owner's responsible but not renters. The HOA is like a third party to the owner/tenant contract.

There is a price to pay for too many rentals. FHA and other government backed type loans do have limits. Which means they may not refinance houses, charge a higher rate, or drop the ability to get their loans altogether. So it is vital the HOA find a good balance but realize also their limits.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Valerie,

This was partially discussed in one of your earlier threads.

Perhaps it would be more productive if you were to tell us your concerns on the issue.

To answer one of your more specific questions:
"Is there a way to do so [limit rentals]?"

The proper way to limit rentals is to amend the governing documents. Specifically the deed restrictions (CC&Rs). Amending the CC&Rs will give the Association the best basis for any future legal challenge to the issue. If you amend a document other than the CC&Rs to impose rental restrictions the restriction might not stand up to a legal challenge.

JeanneK3 (Maryland)
Posts: 562

Posted:

Maryland has a law that says any condominium established after July 1, 1996, can amend its governing documents to limit rentals.

I wonder how this can be done fairly?

Jeanne

CarolR11 (Colorado)
Posts: 2,563

Posted:

Valerie, as others observe, this topic has been beaten into the ground on this forum. Check the Library.

For pros & cons for rental limitations, check Davis-stirling.com. Note that it's mainly about HOAs in CA, but go to "Rental Limitations" in their Main Index for good generic info.

In disagreement with Melissa, I've think I've seen many examples on this forum of states other than CA where HOAs can limit rentals in various ways. Jeanne gives us an MD example, I've seen FL examples, etc. So check your own NC statutes, Valerie. AND your own governing docs, too, though they probably must defer to your state's statutes.

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