Every day, more people decide to rent property from within homeowners associations. Leasing units can earn a nice profit for landlords, but this business venture comes with risks for renters. If property owners belong to a homeowners' association, tenants may face unexpected issues. Some renters unknowingly break the HOA's rules and regulations. Others tenants learn they can only rent out the property for a short time. Homeowners may also pay hefty fines, because of their tenants' violations.
Today's RealManage guide will teach renters about property owners' responsibilities when renting an HOA property. Tenants will also learn about their rights under the law.
What is a Homeowners Association?
A homeowners association is an organization that oversees a subdivision. They manage community housing developments including condominiums, townhouses, single family homes, and apartments. Members pay dues to maintain their landscaping and other public areas. The landlord can pass these expenses directly or indirectly through rent increases.
Homeowner associations must follow the Fair Housing Act. This rule means they can't prohibit certain people from renting a home.
What are CC&Rs and Bylaws?
HOAs require property owners to follow their covenants, conditions, and restrictions (CC&R). These enforceable legal documents list what residents can do with their property. The organization may have rules about colors you can paint your house. They might prohibit residents from having pets. Their group can restrict parking in specific areas.
HOA bylaws regulate the community chooses its Board of Directors. These rules also govern how the association operates its voting process and association meetings.
Who Pays the HOA Fees: Renters or Landlords?
The lease stipulates who pays the HOA fees. The homeowners are usually responsible for these fees since HOA can foreclose on the home properties if tenants refuse to pay them.
Landlords usually include the HOA dues in the rent. Sometimes, the lease requires tenants to pay the association dues directly.
The Landlord's Responsibilities in HOAs
The HOA expects both the renter and homeowner, to abide by the regulations. Landlords must enforce the community's rules when tenants lease property from them. Homeowners must abide by the maintenance guidelines of their association.
For example, an HOA may demand a property owner to paint their home's exterior once a year. The landlord maintains the property, not the renters.
An HOA may ask homeowners to take the following actions when renting their property to tenants.
- Landlords should ensure renters follow all HOA rules in their rental agreements.
- Homeowners should provide rental agreements with HOA rules to tenants. These legal documents ensure renters comply the association's regulations. The contracts should contain the landlord's emergency contact information.
- Property owners must give governing documents (CC&Rs) and HOA rules to tenants before they move in.
- Homeowners are responsible for tenants' violations.
- Renters must submit all requests to the HOA through the property owners.
- Some HOAs have regulations about how long tenants can lease a property. They can also limit the number of units that landowners rent.
Four Transferable HOA Rights to Renters
The owners transfer some rights when renters lease their property. These include:
- Using the HOA's Common Areas - HOA government documents have provisions that require owners to surrender their rights to use common areas to their renter. Several California court decisions have validated these restrictions.
- Reviewing Association Records - Tenants can't request association records. HOA members can choose another person, like renters, to inspect and copy documents on their behalf.
- Serving on an HOA Board - HOA governing documents may prohibit non-members to serve on its board of directors. If there are no restrictions, renters can serve on the board.
- Keeping Pets - Some HOAs allow members to house pets on their property. Some organizations don't specify whether their renters can keep them as well. Renters must ask their landowners before getting a pet.
Four Non-Transferable HOA Rights
There are several rights that HOA property owners cannot transfer to their tenants. These actions include:
- HOA Voting Rights - Tenants don't have the right to vote on behalf of another member. Only other association members can serve as a proxy.
- Attending Board and Membership Meetings - Only HOA members have the right to attend these meetings unless stated otherwise in the governing documents. Most HOAs limit these meetings to members. Landlords can't name tenants as proxies. Only other members may assume these duties.
- Suing the Association - Only the owner of the property can file a legal action against the HOA. Since the tenants are not property owners, they have no authority to enforce a CC&R or sue. - Martin v. Bridgeport Community Assn. (209)
- Using Dispute Resolution Procedures - Association members can only use dispute resolution procedures. These rights don't extend to renters.
Who Takes Action Against Renters that Break HOA Rules?
Homeowners' associations can't take direct action against renters that break their CC&Rs. They must notify landlords about the violation, and the owners must handle the issues.
These organizations assess fines against the landlord if the tenant breaks the rules. The owners can recoup the fine if it's outlined in the lease.
There are a few exceptions to this process. HOAs don't need to contact landowners if tenants commit a crime. They can contact law enforcement, instead. The group can also tow renters' cars. It is the tenants' responsibility to pay these fines.
Protect Your Rights as a Renter
Although renters must abide by the Homeowners' Association rules, they still have rights under the law. The property owner must also follow their home state's Landlord-Tenant Laws that include the Fair Housing Act and Fair Credit Reporting Act.Citations