Common Rental Restrictions Found in an HOA

Bryce Ross and Jason LeDell

Red and white for rent side hanging outside of house

More than 30% of U.S. households live in a community governed by a homeowners’ association (HOA). With professionally maintained amenities, carefully planned landscaping, and enhanced property values, homebuyers and renters alike seek the conveniences of association living.

Owning a rental property within an HOA can be rewarding, but it also has its challenges. Here, RHOME’s Bryce Ross, national director of property management, and Jason LeDell, regional operations manager, offer expert insights into the most common HOA rental restrictions and tips on how to ensure compliance.

Can You Rent Out an HOA Home?

You may be able to rent out your HOA home, depending on state laws and your community’s Codes, Covenants & Restrictions (CC&Rs). Some states, like California, prohibit HOAs from imposing rental restrictions. Other states, like Texas, allow HOA rental restrictions. While it’s possible that some HOAs can ban rentals altogether, others may allow you to lease your property—as long as you meet the legal criteria.

A community’s governing documents usually detail the HOA’s rental restrictions—the procedural processes, rules, and regulations regarding renting. Like every state, every community is unique and may have different policies that affect owners and renters. It’s important that you seek guidance from an attorney and review the governing documents to confirm your rental property adheres to state laws and the laws of the community.

Learn More: A Breakdown of HOA Governing Documents

Common HOA Rental Restrictions

Found in a community’s governing documents, HOA rental restrictions are legally binding. Failure to comply can result in fines and other legal consequences. Typical rental policy restrictions include:

Rental Caps

Set by an HOA board of directors, a rental cap is the maximum number of rentals allowed in the community. Usually, the number of rentals is capped at 20%. That means 80% of the homes in a community must be owner-occupied. It’s the board’s responsibility not only to enforce the rule but also to keep track of the number of rentals.

To ensure your community has not reached its rental capacity, contact your association board. With many rental opportunities coming on a first-come, first-served basis, it’s possible that your community has already met its 20% threshold.

Man holding keys as another man signs lease agreement.

Lease Restrictions

HOAs may restrict the lease terms and further require complete transparency of the rental agreement. A sample HOA rental restriction includes prohibiting rentals under 30 days. This common type of rental restriction is designed to discourage short-term rentals. Most restrictions state that lots within the community are to be used for “single-family residential.” Many municipalities consider a lease lasting less than one month to be a commercial use of the property. Other rules HOAs may impose regarding the lease include:

A copy of the lease agreement. Landlords must usually provide the HOA with a copy of the lease agreement.
Proof of tenant acknowledgement. An owner may be required to submit a tenant-signed form that acknowledges that the tenant has received, acknowledged, and agreed to abide by the HOA rules.
Renter’s insurance verification. Before moving in, a potential tenant may have to provide proof of renter’s insurance to the HOA.

How to Avoid Legal Issues

Landlords have a duty to ensure they’re legally permitted to lease their homes before renting them out. HOA rental restrictions are generally legally binding, and renting without HOA approval can result in a violation. To avoid getting into legal trouble:

Hire a professional management company. Experienced in everything from contract negotiations and local, state, and federal laws to property maintenance and marketing your home, a professional property management company ensures regulatory compliance and a successful lease.
Check your governing documents. Confirm your rental property adheres to the community’s laws. You might find additional tenant screening requirements, rental investment restrictions, and long-term lease stipulations.
Confirm you’re in good standing with the community. Address HOA violations and ensure fees, fines, or dues are paid. Owing your HOA money could complicate leasing your home and prevent you from doing it altogether.
Keep good records and document everything. Protect your rights as a landlord and maintain accurate lease agreements, financial records, and other legal forms. Document tenant interactions, maintenance requests, and HOA correspondence in case legal disputes arise.
Stay tuned in to regulatory updates. Rental laws, like rent control, eviction procedures, and tenant rights change frequently. Consult a property management expert or lawyer about rent issues and frequently check your local government’s website to stay up-to-date on regulatory changes.

Learn More: How Government Impacts Associations

What to Do Before Renting Out Your HOA Home

HOAs have rental restrictions that can limit rental potential, so it’s important you understand what’s allowed and what’s not allowed before leasing your HOA home or property. Read “7 Tips: What to Do Before Renting Out Your HOA Home” to learn best practices for renting your HOA home.