HOA Rental Policies
Owning a home within a homeowner's association (HOA) can come with many advantages such as the upkeep of the appearances of the community, access to different amenities as well as keeping your property values high to name a few. Different HOAs have different benefits based on the community amenities but Ftdespite the advantages contributing to the overall health and benefits of the community there seems to be a growing tension from all HOAs whether they are on the board or are a homeowner, the concept of HOA rental restrictions. The purpose of the rental restrictions are to balance the overall well being of the entire community and the individual interests of homeowners who desire to rent out their property. While this can be frustrating to Homeowners its important to know this is designed to preserve the harmony of the neighbourhood. So you must ask the question what are the rental restrictions HOAs are allowed to intact?
First off, Texas state laws empower homeowners associations give the authority to place limitations on property rentals but the restrictions must be apart of the HOA's governing documents. The restrictions must be in the HOA's declaration or amended after the HOA has already formed. This can be done through an amendment and a community vote to update the governing documents.
Types of HOA Rental Restrictions
Homeowners' Associations (HOAs) can enforce rental restrictions in two primary ways: by setting a rental cap or by imposing specific lease restrictions.
Lease Restrictions
Lease restrictions on the other hand involve specific rules in which landlords must include in lease agreements when renting out properties within an HOA. A common requirement is a minimum lease term, often set at 30 days, however this varies by association. This restriction helps to limit the number of short-term rentals in the community. Another typical lease restriction requires tenants to follow the community's rules and regulations. This gives landlords the authority to evict tenants for valid reasons, such as violations of HOA rules, which would be considered a breach of the lease agreement.
Rental Caps
A rental cap limits the number or percentage of homes in the community that can be rented out at any given time. For instance, if an HOA enforces a 20% rental cap, only up to 20% of the homes can be occupied by tenants at one time. When this limit is reached, other homeowners are prohibited from renting out their properties until the number of rentals go below the set cap. Typically a rental caps are on a first-come, first-served basis. Additionally, many HOAs require homeowners to live in their properties for a certain number of years before renting them out. This rule helps prevent large investors or businesses from buying properties with the sole intention of turning them into rentals.
Even though rental caps may concern some residents, it's important to engage in discussions with your HOA and encourage community involvement. Without community involvement you might end up in a community making decisions you don't agree with. Therefore community involvement can support a sense of unity and provide a platform for shaping the future of the neighbourhood.
Rental Policy
A good rental policy is always important but it is always a good idea to have a lawyer review any document you are going to add to any governing documents. If, for instance, your policy goes beyond setting a restrictive threshold but also mandates renters need to attend an orientation you need to make sure this is in line with current HOA laws and make sure the policy is written to encompass this. However the document is written you ideally want any renter to feel apart of the community. By doing this you ensure the renter will see a sense of belonging and shows the best of what your community has to offer. It is not unheard of for renters to eventually become owners within the same neighbourhood.
While rental policies can be a sore spot for many board members and homeowners if it is done without bias and with the purpose of welcoming new people within the community the outcome is more likely to be beneficial to everyone. If you are thinking of setting this policy please reach out to PMI Cross Timbers and we would happy to guide you on the correct path.
