HOA Proposing Prohibiting Leases

[BuyLowSellHigh]

What is the name of your state? Indiana

I live in a single family home 25 years old goverened by HOA created at time of construction. The HOA board has just proposed an amendment change that would prohibit leasing of property or allowing anyone other than immediate family of owner to live in family (prohibit all leases not just short term). This house is owned in my name only and I do have a current mortgage at a rate of 3.0%. I have lived here 10 years and have no plans on moving. However, I have one teenager left at home and had planned to potentially move to a smaller home maybe a few years in the future and rent this home.

The association in the amendment would specifically grandfather existing leases until the end of their term. Is there an action I can take now to allow me to rent later? I was thinking about retitling the property to a Trust, LLC, or Corporation but I don't think I can do that because of the mortgage and don't know if that would work anyway. But what about creating a long term lease with a LLC or Corporation which could then sublease in the future? Anyone have any other experiences or ideas?

 

[LdiJ]

What is the name of your state? Indiana

I live in a single family home 25 years old goverened by HOA created at time of construction. The HOA board has just proposed an amendment change that would prohibit leasing of property or allowing anyone other than immediate family of owner to live in family (prohibit all leases not just short term). This house is owned in my name only and I do have a current mortgage at a rate of 3.0%. I have lived here 10 years and have no plans on moving. However, I have one teenager left at home and had planned to potentially move to a smaller home maybe a few years in the future and rent this home.

The association in the amendment would specifically grandfather existing leases until the end of their term. Is there an action I can take now to allow me to rent later? I was thinking about retitling the property to a Trust, LLC, or Corporation but I don't think I can do that because of the mortgage and don't know if that would work anyway. But what about creating a long term lease with a LLC or Corporation which could then sublease in the future? Anyone have any other experiences or ideas?

The only true way to protect a future right to lease the property would be to campaign to defeat the amendment and successfully defeat it.

 

[quincy]

What is the name of your state? Indiana

I live in a single family home 25 years old goverened by HOA created at time of construction. The HOA board has just proposed an amendment change that would prohibit leasing of property or allowing anyone other than immediate family of owner to live in family (prohibit all leases not just short term). This house is owned in my name only and I do have a current mortgage at a rate of 3.0%. I have lived here 10 years and have no plans on moving. However, I have one teenager left at home and had planned to potentially move to a smaller home maybe a few years in the future and rent this home.

The association in the amendment would specifically grandfather existing leases until the end of their term. Is there an action I can take now to allow me to rent later? I was thinking about retitling the property to a Trust, LLC, or Corporation but I don't think I can do that because of the mortgage and don't know if that would work anyway. But what about creating a long term lease with a LLC or Corporation which could then sublease in the future? Anyone have any other experiences or ideas?

Have you protested the proposed rule change? Are there others in your HOA who object to the rule change? I agree with LdiJ that defeating the proposal is probably the best (and possibly only) way to guarantee future rental use for your property.

You could also try to remove board members who support this rule change and replace them with board members sympathetic to homeowners who rent out their properties.

 

[BuyLowSellHigh]

The only true way to protect a future right to lease the property would be to campaign to defeat the amendment and successfully defeat it.

I appreciate those suggestion and was already thinking in that direction. Restrictions like this and rent controls have significantly contributed to our housing crisis by not allow efficient use of housing. I just got a letter from the association and was blind sided by this. It could have significant financial impact on my family so I need to organize my thoughts so I can respond intellectually instead of emotionally.

 

[quincy]

I appreciate those suggestion and was already thinking in that direction. Restrictions like this and rent controls have significantly contributed to our housing crisis by not allow efficient use of housing. I just got a letter from the association and was blind sided by this. It could have significant financial impact on my family so I need to organize my thoughts so I can respond intellectually instead of emotionally.

You could also try to amend the proposed amendment by inserting a provision that permits leasing property on petition to the board (where the board must approve a tenant prior to rental).

 

[LdiJ]

You could also try to amend the proposed amendment by inserting a provision that permits leasing property on petition to the board (where the board must approve a tenant prior to rental).

That is a possible solution however if the board is very anti tenant then its possible that they would never approve any potential renter. I would still do my best to try to defeat the amendment entirely.

The way it is being proposed now (only close family of the owner can live in the home) someone wouldn't even be able to have a housesitter live there if they were temporarily away from home for work or a sabbatical. So, besides the economic issues involved it is seriously micromanaging as well. Of course, HOA's are famous for micromanaging so it is not really a surprise.

 

[quincy]

… I would still do my best to try to defeat the amendment entirely.

The way it is being proposed now (only close family of the owner can live in the home) someone wouldn't even be able to have a housesitter live there if they were temporarily away from home for work or a sabbatical. So, besides the economic issues involved it is seriously micromanaging as well. Of course, HOA's are famous for micromanaging so it is not really a surprise.

Well, we haven’t seen the actual amendment so we don’t know how exactly it is worded or if there are other exception to the no-tenant/lease rule. But I agree that defeating the unwanted proposal would be the best possible outcome for BuyLowSellHigh. How realistic that outcome is would be anyone’s guess.

 

[FarmerJ]

You may find you have no choice but to sell and find another place to buy that is free of any kind of HOA in order to have rental income in the future.

 

[zddoodah]

I have . . . no plans on moving. However, I . . . had planned to potentially move to a smaller home maybe a few years in the future

Ummm...as phrased, this means that, at some point in the past, you had plans to move but you don't have those plans anymore. However, I don't think that's what you actually meant to say and that these two statements hopelessly contradict each other.

As far as the proposed amendment, has it been reduced to writing? If so, quote it word-for-word. If it hasn't been reduced to writing, then it's impossible to opine intelligently how you might get around it (especially given your uncertainty about what your mortgage permits).

BTW, IMO, being a residential landlord SUCKS hard and is not something to aspire to.

 

[quincy]

… BTW, IMO, being a residential landlord SUCKS hard and is not something to aspire to.

I would not want to rent out a house that is governed by an HOA necessarily but being a landlord can be both fun and profitable if the landlord knows what s/he’s doing. Many don’t.