Can a Homeowners' Association Stop You From Renting Your House Out?

Can a Homeowners' Association Stop You From Renting Your House Out?
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If you became part of a homeowners association when you bought your house, then you have to follow the association rules. For example, a homeowners association usually has common areas and amenities, so you have to pay fees every month to maintain them. The association may also have rules and restrictions for various things, including landscaping, paint color, window coverings and rental units.

HOAs Can Ban Rentals

When you purchased your house, you agreed to follow the rules and restrictions of the homeowners association, or HOA. This means that the homeowners association can stop you from renting out your house, even if the rental restriction was only enacted after your purchase. However, whether the association wants to stop you from renting your house out depends on how active the management is. According to MSN Real Estate, about 40 percent of homeowners associations have restrictions that can stop you from renting your house out.

Limits May Apply

The types of restrictions that a homeowners association places on rental units vary. The strictest associations ban rentals altogether. Some associations limit the number of houses within the community that can be rented out. For example, if the association limits the number of rentals to five, you can only rent your house out if there are fewer than five existing rentals in the community. Otherwise, you may have to get on a waiting list. Some associations may allow owners in economic hardships to rent out their houses even if the community has hit the limit on the number of rentals.

Rental Drawbacks

The community may suffer when the homeowners association allows rental units. Renters may bring crime and vandalism to the community because they're not as invested in the property as owners are. They may not put in much effort into home maintenance and repairs, so a lot of maintenance fees that other owners pay may have to go into rental properties. In the end, renters may make the community unsafe and less livable, eventually pulling the property prices down.

Rental Benefits

Some homeowners associations loosen their rental restrictions to help attract buyers and occupants. In difficult times, homeowners may only be able to keep their homes by renting them out. For the homeowners association, allowing rentals may be better than having foreclosures and vacancies in the community. A foreclosure in the community could cause the values of neighboring homes to drop.