Can a Homeowners' Association Restrict Leasing? Understanding the Power of Contracts

You've found the perfect home: it's in a lovely neighborhood, has all the amenities you want, and, best of all, it's within your budget. However, it's part of a homeowners' association (HOA), and you've heard they have rules against leasing out homes. "But wait," you think, "Isn't leasing permitted by state law?"

In truth, while state law might permit leasing, an HOA can indeed set its own rules that may prohibit or restrict it. Let’s take a closer look at why. 

It's All About the Contract

When you purchase a home within an HOA, you aren't just buying the property. You're also entering into a contractual agreement to abide by that association's conditions, covenants, and restrictions (CC&Rs)—also commonly referred to as the governing documents of the HOA.

These CC&Rs are a set of rules that homeowners agree to follow as a condition of purchasing their home. They might dictate everything from the color you can paint your house to whether you can lease or rent out your home. Even if state law allows for leasing, the specific contract you enter into with the HOA can restrict or prohibit it.

Can HOA Rules Change? 

An interesting aspect of HOAs is that their rules aren't set in stone. Members can vote to amend the CC&Rs. This might raise eyebrows—how can rules be changed after you've bought your home? However, the ability to amend these rules is usually embedded within the CC&Rs themselves.

For changes to be valid, they typically have to be properly voted on and passed, often requiring more than just a simple majority—usually a supermajority—of members to agree. So, even if you bought your home with one set of rules, those rules can change if enough of your fellow homeowners vote for it. This democratic process ensures that the community's evolving needs and preferences are met, but it can sometimes come as a surprise to individual homeowners.

The Value of Legal Counsel

Before purchasing a home within an HOA, it's incredibly advantageous to have an attorney familiar with your state's laws review the association's governing documents. They can provide insights into what you're agreeing to and highlight potential issues you might face down the line, such as leasing restrictions. 

Additionally, if you're already a member of an HOA and there's talk of changing the governing documents, legal counsel can be invaluable. An attorney can guide you through the process, and help you insist that all amendments are in line with state laws and the association's own rules. 

Know Your Rights with LegalFix

HOAs offer numerous benefits, from maintaining common areas to fostering community cohesion. However, they come with their own set of rules, which can sometimes deviate from broader state laws. By understanding the contractual nature of these associations and the power of their governing documents, homeowners (and potential homeowners) can make informed decisions and navigate their HOA's unique landscape more effectively. As always, seeking the advice of an attorney can provide clarity and protection in these matters. 

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