An ever-increasing percentage of us live in neighborhoods, that are subject to HOA and Condo rules that limit how you can you your home. Rental restrictions are a hot topic of debate with homeowners associations (“HOAs”) in recent years. The development of websites such as VRBO.com and AirBnB.com have made it easier for home owners to rent out their homes, or even just spare bedrooms, to travelers for short-term, or even nightly, stays. This has resulted in an increase in the number of homes being used in this manner, which has brought with it conflict among homeowners and their HOAs.

Many HOAs have reacted by instituting or strengthening restrictions on rentals. This has, predictably, led to further conflict and litigation.

As with many questions in the law, the answer is, “It depends.”

The answer depends on three primary factors:
1) Do the current covenants have any rental restrictions;
2) What do the covenants say about amendments; and,
3) What are the current rules?

First of all, it is important to know that properly adopted covenants are enforceable restrictions on the rights of property owners. If the covenants clearly restrict the type of rental you are wanting to do, and that rental restriction was in the covenants at the time you bought your home, then the HOA can most likely prevent you from renting. Examples include common terms prohibiting tenancies of less than six months or a year, or prohibiting leasing for a term of less than 30 days.

However, if the covenants simply say that the homes are to be used for “single family residential” purposes, most courts would say the covenants do not prevent even nightly rentals. Using a house for rental purposes is considered “residential” even if the owner of the home is making money on the rentals, which is a commercial enterprise. The courts look at how the occupants of the house are using it.
The conflicts tend to arise where the HOA attempts to amend the covenants to try to reign in rentals that are perceived by some to be beyond the intent of the covenants – but not actually restricted by the covenants.

In the unlikely event your HOA’s covenants specify that an amendment may add new restrictions on the use of the houses in the development, the answer will be pretty clear that the HOA may enact new restrictions on rentals by whatever percentage vote is specified in the covenants. However, few covenants are so explicit.
Instead, covenants commonly have language like this regarding the right of the HOA to amend the covenants: “These Covenants may be amended, in whole or in part, by an instrument signed by not less than [two-thirds, 75%, or some other number] of the Lot Owners.” Note that no mention is made of adding new restrictions.

In many cases the rules just don’t say anything about rentals. Most modern association documents speak about lease but utterly fail to address rentals. It is important to review your documents and not take the property manages word for it. Many times lawyers will write letters to property owners and cite parts of the rules that just don’t apply or are not enforceable in these situations.