Can the CC&Rs monetarily discourage renting?

Reginald,
Oh, were it that simple. I wouldn't even venture to say if YOUR association can allow renting. Someone from CA will state his much better than I. But, let's say your documents do not have any reference to renting at all,,,,,,,,,,none.
Taking into consideration what you posted and assuming you are a condo., I would start by looking up what state statues apply, I believe it is the Davis Sterling act. Wade through that and get your feet on the ground. Next, I would take a short cut, and ask any Condo you happen to run across that you have certained allow renting and ask them. Check two or three out. This will give you a quick lesson in "how to" for your area. Any you run across that have a rental clause in their documents, ask to copy it. For me there is nothing like going to the horses mouth, any mouth. Given, there is nothing in your documents about renting, I am sure you will have many other doors open up as far as your documents are concerned.

If you have a solid BOD and can muster your entire ownership to write covenants controlling rentals, you are not going to prohibit renting. But, you can control and write covenants to restrict or control some aspects, depending on what you all decide. This is why I say, talk to some associations that are dealing with this right now. If you try to cook book it, you are going to get in trouble and time will drag on forever. Or, if you all are rich, you can hire an attorney, but one may be necessary at some point but best hold off until you have looked into all this. With a unit so small, it is hard to imagine how you all handle your business affairs, but somewhere, you are probably chartered by the state as a business. You need to know a lot more groundwork before you tackle rental problems.

Personal advice, get a couple owners to help you look into your association documents, make sure they are real and registered at the court house, search courthouse records for everything you can find about you place. Assign each owner helping a specific area that seems unclear, then come together and see what you have. In order to address your question, you must be asking from a solid knowledge base about your place. I am sure some good folks will post here chapter and verse, check the links, left on this page for documents required by the state, check the search feature top of this page for past posting about renting, and renting in CA. Not an easy job, go slow.

Hey Mary,
I don't think the OP wants to change assessments, I think he wants to attach special condition to those that rent and collect some $$$ to offset the rental requirements the association has to provide. Also, as you say if the assessments are all the same he is probably in an HOA, but if he is in a condo, there is no way I know that he can change assessments without changing for all. The Board of course, can make changes in the documents and add clauses, but that also requires owner approval under the doc, as use say.

Reginald,
There are no Federal laws that address premiums or special assessments on rental units or the restrictions of.

You will need to check with your County as many of the do have a special tax on rentals but that would be related to the owners tax, not the association.

To levy a special rate on any rental units would need to have an amendment to your bylaws as your current ones do not address a difference in owner occupied verses rented unit. You do not have a rental ban, therefore units may be rented, is that correct?

I would caution you on enacting such a charge. You can never tell when the situation might arise for yourself or other owners where they might be forced to rent out their units. Your association CAN charge an initial fee for processing any renter coming in and that sort of items but a monthly fee, IMHO, is not justified. Renters are occupants just like owners are and to seperate the owners of rented units is creating two classes of ownership.

Reginald, even though the occupants will change, the OWNERS are still responsible for ensuring that whoever IS in the unit is complying with ALL of the CC&Rs.

So whether it's a rentor living there, or a resident owner, it doesn't matter. You do the same enforcement either way, through the owner.

Reginald,
You are mostly right in your obesrvations and these things are a concern. Michelle is right also and the owners are responsible. Don't mean to sound as if I am judging Michelle opinion, just happen to agree with it.

You speak about the # of renters reaching 25 % and this triggers certain things to happen. I have discussed this subject for years with all kinds of people and can find no evidence of this happening. Who would mandate this property value reduction? What you may be referring to is some sort of loose regulation that some Mortgages brokers use as a cut off point beyond which that entity will not loan money for mortgages. FHA comes to mind, and this % seems to fluctuate from time to time. When I try to make sense out of it I conclude this % value could be real and effect specific properties. It is not wholesale "line in the sand" don't cross it at all. But consider this:

If you are in a condo and too many renters causes 1 homeowner to lose a sale because of this, then is that person liable, or more correctly, is the Board liable to the seller because the Board interferred with the Market Place, and restricted the sale population of your buyer, by not restricting rentals.

Lots of questions few definitive answers. IMHO, this issue has to be considered case by case. None of these HOA's or Condo are the same, they all have personalities and requirements and all are impacted one way or another by the area they in which they live. I certainly think it is possible to have two nearly identical condos side by side and one could be adversely effected by renters, in the other renters might appear to be all that holds the association together. Then you throw in term of rentals and a big mess appears.

So. it can be done through the documents, and state statutes, statutes,

Our HOA has the same question, Our stance is that due to the large number of rentals in our development, we're finding that when they resell, they sell for less than the owner occupied, therefore lowering everyone's property values. Rentals take more wear and tear, usually, than an owner occupied unit. We're visitin our attorney today to ask this same question. We have 30 our of 64 units being used as rentals and some have multiple, unrelated tenants. Another issue to discuss since our Covenants state these are not to be used as apartments, but are single family dwellings.

One has to be careful about the argument regarding property values and renters. If rentals are discouraged it may decrease rather than increase property values. The outcome is not clear, and the evidence is not very strong.

A prohibition on renting in current economic conditions may tend to (1) discourage investors from purchasing units thereby lowering values, (2) increase the number of vacant units on the market as owners move out which also will tend to force prices lower, and (3) force more units into foreclosure also tending to depress prices.

There is this wildly unproven notion that homeowners associations work to maintain or increase property values. The evidence comes primarily from the Community Associations Institute which has a vested interest in making such an assertion. They do not do the research with clean hands.

There is no independent and verifiable research which unambiguously supports the notion that homeowners associations sustain or increase property values. Too much of what we think is evidence is what some people want to believe, rather than fact.

It is true that some mortgage lenders are limiting their homeowner loans based on a threshold of owner-occupied/rental units in a development. At a certain threshold, these development become more like investment properties than residences.

I would advise anyone to be extremely hesitant in this economic climate to place limits on or to discourage investors or renters. You may end up with more vacant units, more units in foreclosure, and lower property values, just the opposite of what you seek.

I agree wholeheartedly. Sadly though, wisdom like common sense, is not very common.

Too many decisions are made for the wrong reasons, leading to all sorts of unintended consequences.

Were I advising an association considering limitations on rentals, I would say:

Make the decision to limit rentals based on quality of life issues, not on the basis of property values. Renters have a different sense of participation and commitment to the community than do the owners. It is entirely appropriate to want to live in a community of resident owners, not investors. Let the property values reflect the kind of community you are.

George writes:

>>>There is this wildly unproven notion that homeowners associations work to maintain or increase property values. The evidence comes primarily from the Community Associations Institute which has a vested interest in making such an assertion. They do not do the research with clean hands.<<<

Gee, I thought that notion was very high on the list of most HOAs and BODs. It sure is on ours.

Whether the efforts do so is a separate issue.