HOAs and Rental Properties

Author: Alex Delaney

Many people appreciate neighborhoods with HOAs as they maintain a certain level of aesthetics. HOAs have rules to maintain property values and community interests. This can be a good thing. Association officers often check for compliance and send notices when rules are not being followed, giving you, the landlord, another eye on the property. However, those rules can create problems if the landlord is not careful.

HOAs often view rentals as detrimental to the overall well being of a community due to the perception that renters do not treat the property as well as an owner will. Because of this, HOAs may limit the number of rentals allowed in the community. They may outright ban any rentals. Or they may have a requirement that owners live in the property for a period of time before renting. They may also have a cumbersome approval process for renters causing many prospects to go elsewhere. 

Know your HOA’s rules. HOAs are governed by Covenants, Conditions and Restrictions.   You should always review these documents before purchasing a property with the plan to rent it. 

So how do you make this cumbersome process work?

1) Review the HOA covenant and restrictions and know what is required.

2) Ensure you have scheduled work for any exterior maintenance issues, i.e. lawn mowing, hedge trimming, exterior lights.

3) Put required HOA rules in the lease or include in the lease a stipulation that the tenant agrees to follow all bylaws set forth by the HOA. 

4) Spell out the rules and issues in a document separate from (and covered by) the lease and have the tenant initial each item.

4) Know the sign restrictions and follow them.

5) Make sure you pay your HOA fees whether the property is rented or vacant.

The goal of the HOA is to provide a well-run community. The goal of the landlord is to have a long term, respectful, paying tenant. As long as both groups follow their goals, both can benefit from each other.