HOA rental restrictions can be a hot topic in almost any community. Some homeowners want the freedom to rent their place out when they need to. Others worry that rentals might change the neighborhood’s feel. Either way, it helps to understand what these rules actually mean.
What are HOA Rental Restrictions?
Renting out a vacation home or an extra room in a primary residence is a good way to use space while earning extra income. Unfortunately, not all homeowners are free to do so. Those living in HOAs and condo communities, in particular, may need to consult their rules first before advertising a rental.
Homeowners association rental restrictions limit how owners can rent their property. Specific restrictions can vary from one community to another, but they often govern occupancy caps, lease durations, and other restrictions. Some associations even impose total bans on rentals.
Some people might think that HOA or condo rental restrictions go too far, but they do serve a purpose. These rules exist to maintain the community’s character. They minimize tenant turnover and the added noise and traffic that renters often bring.
Additionally, fewer renters can mean fewer maintenance issues for the HOA. A constant stream of new tenants can lead to premature wear and tear on common elements, increasing maintenance costs.
Beyond that, these rules aim to protect property values. Lenders and banks tend to view communities with high rental percentages as riskier. Long-term residents are also more inclined to take care of their neighborhoods than transient residents.
Can HOA Restrict Rentals in Washington DC?
Yes, homeowners associations in Washington, D.C. can generally restrict rentals. That said, associations must expressly stipulate these restrictions in the governing documents. These rules must have been properly adopted, too.
For condominiums, the DC Condominium Act applies. According to Section 42–1903.08, the COA may reasonably restrict unit rentals, except for the exception. If the owner has already been renting their unit when the association adopts the new rental restriction, the rule does not immediately apply. Instead, the new rules will only apply later if the owner moves back in and lives there, or if they sell the unit to a new owner.
The District of Columbia may also have additional requirements. For example, landlords must hold a license even if they rent only one unit. This license remains effective for one year. Homeowners must first present this license to the board before they can rent out their space.
Most Common HOA Rental Restrictions
Rental restrictions can vary by association. Some communities place only a few limitations, while others have more comprehensive restrictions. That said, some HOA rental restrictions are more common than others.
1. HOA Rental Caps
An HOA or condo may impose a cap on the number or percentage of units that may be rented out at any given time. Exact specifications on HOA rental limits can differ, but a maximum of 20% is the standard. This ensures the association doesn’t become too rental-heavy, which lenders and insurers frown upon.
2. No Short-Term Rentals
Associations may stipulate that only long-term rentals are permitted in the community. There’s a reason why HOA short-term rental restrictions are more common. Short-term rentals are seen as more disruptive. They bring more noise, traffic, and safety concerns to the neighborhood.
Residents feel more at ease when they recognize their neighbors. Consistently running into new faces can unsettle homeowners, making them feel less secure in their own community. The frequent turnover of guests also increases the likelihood of damage to common property.
If an HOA wishes to enforce a similar rule, it must clearly define what counts as short- and long-term rentals. Typically, anything below 30 days is considered short-term. Some communities impose minimum lease terms, such as 6 months or 1 year.
3. Occupancy Limits
Associations may also enforce occupancy limits. This limits the number of tenants or guests per unit, primarily to manage noise and comply with fire safety codes. Many also extend these limits to vehicles to control parking.
4. Residency Requirements
Many associations wish to discourage institutional investors or deter buyers who just want earn rental income. To achieve this, HOAs stipulate residency requirements. For example, an association may require owners to live in the home for a minimum set period, such as two years, before they can rent it out.
5. Landlord Responsibility
Residents, including renters, must adhere to the community’s rules. To ensure enforcement, associations often require landlords to include HOA rules in lease agreements. Tenants must understand these rules and their obligation to follow them.
If a tenant violates a rule, the owner or landlord is typically held responsible. That means the owner will shoulder any penalties, including fines and even legal action.
6. Insurance Requirements
Risk management is a top priority for associations, which is why many require landlords to carry liability insurance for short-term rentals. This will help protect both the landlord and the HOA.
7. Complete Ban
Believe it or not, many communities prohibit rentals altogether, regardless of whether they’re short- or long-term. Some associations view rentals as liability magnets and as lowering neighborhood quality, leading to a total ban. As with other HOA rental restrictions, a blanket prohibition must be clearly authorized by the governing documents.
Where to Find HOA Rental Restrictions
Before leasing a home or unit, owners must confirm if their association even permits it. They must understand the specific rental restrictions that apply to them. But where can homeowners find these restrictions in the first place?
- Disclosure Documents. Homeowners receive a copy of the governing documents, including rental restrictions, when they first purchase a home or unit. These are typically included in the disclosure packet.
- File a Request. For lost copies, homeowners may request replacements by contacting their HOA board or community manager. The process may involve completing a form or submitting an online request. The association may also charge a fee for producing the copies.
- Homeowner Portal. If the association maintains a website, residents can usually access their governing documents through the owner portal.
A Valuable Policy
Limiting as they may seem, HOA rental restrictions work to preserve the community’s character and market value. Homeowners must adhere to these rules and follow proper procedures when renting out their space. Meanwhile, board members must enforce these rules consistently and fairly to avoid liability.
TNWLC offers both HOA management services to communities in Washington, DC. Call us today at (202) 483-8282 or contact us online to get started!
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