Should Your HOA Allow Rentals?

Question.jpg

The pros and cons of allowing rentals in your homeowners association.

A homeowners association (HOA) has the right to institute rules allowing or restricting the ability of its owners to rent or lease their units. Language regarding such a policy can be found in your HOA’s bylaws. Although it can be difficult to change your HOA’s rules, whether or not you should will likely cause a hot debate—with valid points made for both cases.

Why your HOA should allow rentals

Allowing units in your community to be rented or leased can be a much better alternative to a quick sale, short sale or foreclosure situation. Such a policy can provide homeowners facing hardship, such as a job loss, sudden move or military deployment, with flexibility.

Without the ability to rent their units, owners in these situations could be forced to quickly sell their unit or end up trying to sell as a short sale. Neither of these choices is optimal and could result in low-priced sales, which may hurt the value of other units in the community.

And a unit that goes into foreclosure could sit vacant for months—or years—which means no monthly dues are being collected (or will likely ever be collected), and lack of maintenance on the unit could drive repair costs up and resale values down.

Why your HOA should restrict rentals

Your HOA can choose to disallow rentals altogether or limit the number of units that can be rented at any one time. In either case, your HOA may want to restrict rentals for a number of reasons.

Renters can result in frequent move-ins and move-outs, which can disrupt homeowners. Renters also are not as invested in the property as homeowners, so may violate community rules or not maintain their units. And it can be harder to establish a sense of community as renters usually do not stay as long as homeowners.

Other reasons to restrict rentals include a lack of eligible or interested volunteers to participate on the board or in committees, possible higher costs for liability and casualty insurance and increased difficulty for future homeowners to obtain funding from lenders (or for current homeowners to refinance or take out a line of equity).

Whether or not your HOA chooses to allow rentals, the final decision needs to be deemed reasonable, or it will be hard to enforce if it is ever challenged. If your association is considering changing your bylaws or CC&Rs regarding such a policy, consider talking with an attorney familiar with HOAs.

Source: RealtyTimes.com, HOA-Law.com
Search All Articles
Related Articles
Are You Prepared for a Blizzard?
Blizzard2017 saw some of the most extreme weather in years
5 Things To Do in a House Fire
FireAs soon as you hear a smoke detector go off, smell smoke, or see fire, get out as soon as possible.
How to Prevent House Fires
05fire-jumboThere are several things you can do to prepare and prevent disaster from striking your home.
5 Things to do if your House is Still on the Market
House-for-saleThere is a wide array of reasons why your house might not have sold yet, not all of which are in your control.

More...
Most Popular
8 Ways to Winterize Your Home
WinterizesmEach year Americans spend countless hours preparing for the holidays; spending just a few to make sure your home is ready for wi
Idaho - The Gem State
PotatothumbThe state's name is thought to be an Indian name, Ee-dah-hoe, which means "gem of the mountains."
Indiana - The Hoosier State
Tulip_treethumbThe state's residents are commonly referred to as "Hoosiers" although no one seems certain just how the name originated.
First Time Home Buyer Programs - Arizona
Houseredroof120The Arizona Housing Finance Authority assistance for first time and low income prospective home buyers.

More...

Zip Code Profiler

Neighborhoods, Home Values, Schools, City & State Data, Sex Offender Lists, more.

Instant Home Value!