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Limiting Number or Percent of Rentals in HOA

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Pedas2

Junior Member
What is the name of your state?Arizona

I found no state law that prohibits an HOA Board from limiting the number or percent of rentals in an HOA.

Are there any federal laws or real estate provisions that would prohibit an HOA from doing such?

Pursuant to my community's CC&Rs, in addition to the approval of 75% of owners, this amendment would require the consent of 51% of all eligible mortgage holders. Is this logistically feasable?
 


PayrollHRGuy

Senior Member
I found no state law that prohibits an HOA Board from limiting the number or percent of rentals in an HOA.
That wouldn't surprise me at all. In the US the government doesn't randomly make laws that control how entities deal with their property.

Are there any federal laws or real estate provisions that would prohibit an HOA from doing such?
No. See above.

Pursuant to my community's CC&Rs, in addition to the approval of 75% of owners, this amendment would require the consent of 51% of all eligible mortgage holders. Is this logistically feasable?
There is no way we have the ability to know if your HOA can actually pull it off if they pass the amendment. What I can tell you is that if they can't there will simply be no new rentals in the HOA. Which is probably the aim.
 

LdiJ

Senior Member
What is the name of your state?Arizona

I found no state law that prohibits an HOA Board from limiting the number or percent of rentals in an HOA.

Are there any federal laws or real estate provisions that would prohibit an HOA from doing such?

Pursuant to my community's CC&Rs, in addition to the approval of 75% of owners, this amendment would require the consent of 51% of all eligible mortgage holders. Is this logistically feasable?
It would be a LOT of work to 1) get the contact information for every homeowner's mortgage company (many homeowners would not want you to have that information, even ones that would ordinarily be in favor of the amendment) contact those mortgage companies and hope that you can find out who in the company can issue the consent. You might not even get 51% of the homeowners to cough up their mortgage company info.

I could also see it being difficult to get 75% of the owners to sign away their option of renting out their property in the future. Anyone who isn't likely to consider their home to be their forever home would certainly not want that option taken away from them.
 

PayrollHRGuy

Senior Member
I could also see it being difficult to get 75% of the owners to sign away their option of renting out their property in the future.
I read that as 75% of the owners would have to approve the use of a unit as a rental. But you could be right.
 

Pedas2

Junior Member
It would be a LOT of work to 1) get the contact information for every homeowner's mortgage company (many homeowners would not want you to have that information, even ones that would ordinarily be in favor of the amendment) contact those mortgage companies and hope that you can find out who in the company can issue the consent. You might not even get 51% of the homeowners to cough up their mortgage company info.

I could also see it being difficult to get 75% of the owners to sign away their option of renting out their property in the future. Anyone who isn't likely to consider their home to be their forever home would certainly not want that option taken away from them.

Good perspective.
 

LdiJ

Senior Member
I read that as 75% of the owners would have to approve the use of a unit as a rental. But you could be right.
I am not sure that kind of requirement would even be legal. However, I am pretty sure that its 75% to pass the amendment.
 

LdiJ

Senior Member
And why wouldn't it be legal? Do you know of some Arizona law that makes it illegal?
I said I was not sure. Not sure means I don't know for sure if it would or wouldn't be. I know that it would be an extremely burdensome thing to force an individual homeowner to do...or an absurdly expensive thing for an HOA to do every time a homeowner wanted to rent their home out.

However just as a bit of trivia. My cousin lives in a manufactured home community on a lake in Illinois, (you should see these manufactured homes, some of them are practically palaces) and their HOA has a rule saying that no rentals are allowed at all. So, what the homeowners have done to get around that is selling the homes on contract, with the contract being renewable every year. If you renew enough years to actually buy the house, fine. If you don't renew you just don't get back any equity.
 

PayrollHRGuy

Senior Member
I said I was not sure. Not sure means I don't know for sure if it would or wouldn't be. I know that it would be an extremely burdensome thing to force an individual homeowner to do...or an absurdly expensive thing for an HOA to do every time a homeowner wanted to rent their home out.
Then unless you are going to do the least bit of research don't confuse the OPs.

However just as a bit of trivia. My cousin lives in a manufactured home community on a lake in Illinois, (you should see these manufactured homes, some of them are practically palaces) and their HOA has a rule saying that no rentals are allowed at all. So, what the homeowners have done to get around that is selling the homes on contract, with the contract being renewable every year. If you renew enough years to actually buy the house, fine. If you don't renew you just don't get back any equity.
And if the HOA got tired of it they could amend them to say no contract sales.
 

LdiJ

Senior Member
Then unless you are going to do the least bit of research don't confuse the OPs.



And if the HOA got tired of it they could amend them to say no contract sales.
Not unless the required number of homeowners agreed to amend them.;) That will never happen in my cousin's community. They already tried and failed, badly.
 

Taxing Matters

Overtaxed Member
Are there any federal laws or real estate provisions that would prohibit an HOA from doing such?
No. The federal government has not yet gotten into the business of regulating the details of HOAs. That is something left to the states, and most states have statutes that set out some basic rules for HOAs to follow. Few if any states prohibit restricting the number of rentals in the HOA community and those kinds of restrictions are pretty common. Whether an accurate perception or not, a lot of people perceive renters as less desirable neighbors and believe that too many renters in a neighborhood will diminish the qualify of life in the neighborhood and bring down property values.
 

zddoodah

Active Member
Are there any federal laws or real estate provisions that would prohibit an HOA from doing such?
Other than state laws or federal laws, I'm not sure what you might mean by "real estate provisions," but no, there are no state or federal laws on the subject.


Pursuant to my community's CC&Rs, in addition to the approval of 75% of owners, this amendment would require the consent of 51% of all eligible mortgage holders. Is this logistically feasable?
You didn't tell us what "this amendment" refers to (it's not clear if you're seeking to add or get rid of this sort of restriction), but even if you had, no one here could intelligently predict the likelihood that it would be approved. Kinda dumb, though, to give mortgage holders any input regarding changes to CC&Rs. Most mortgage/deed of trust holders aren't likely to give a rip about such things.


It would be a LOT of work to 1) get the contact information for every homeowner's mortgage company (many homeowners would not want you to have that information . . . . You might not even get 51% of the homeowners to cough up their mortgage company info.
Can't comment intelligently on the level of work required without knowing how many homes are subject to HOA rule, and while getting "the homeowners to cough up their mortgage company info" probably would make the process easier, mortgage holder information is public record.
 

Pedas2

Junior Member
Other than state laws or federal laws, I'm not sure what you might mean by "real estate provisions," but no, there are no state or federal laws on the subject.

I mean FHA, Fannie Mae/Freddie Mac rules.


You didn't tell us what "this amendment" refers to (it's not clear if you're seeking to add or get rid of this sort of restriction), but even if you had, no one here could intelligently predict the likelihood that it would be approved. Kinda dumb, though, to give mortgage holders any input regarding changes to CC&Rs. Most mortgage/deed of trust holders aren't likely to give a rip about such things.

This amendment refers to changing/modifying the CCRs to place a numerical or percentage limit on the amount of rentals in HOA. Mortgage holders probably don't care, but the CC&Rs mention them, so must get their consent.



Can't comment intelligently on the level of work required without knowing how many homes are subject to HOA rule, and while getting "the homeowners to cough up their mortgage company info" probably would make the process easier, mortgage holder information is public record.
 

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