Renting In A Recession

Landlords and homeowner associations have always been uneasy bedfellows, in my experience.

In the most common situation, the homeowner association is made up of a majority of resident owners, who elect other residents to serve on the board of directors.  The board makes decisions usually influenced mostly by the residents.  Absentee owners are more difficult to communicate with, you can’t talk to them while they are walking their dog, and they have a different set of priorities.

The conflict between homeowner associations and owners who want or need to rent their homes out to make ends meet is a highlighted in an article in USA Today.  The article focuses on traditional planned developments “clamping down” on rentals to stop the quality of the neighborhood from slipping.  This of course puts boards in conflict with owners who may be forced to downsize by a still-slow housing market and depressed property values.  Helpful government programs for refinancing may put the mortgage payment down near rental values, but still not let a homeowner sell at current prices without losing some cash.  At the same time, homeowners who are fighting to stay in a neighborhood can’t afford to see values drop further with a perception that an area has become rental-heavy.

rent sign


In traditional suburban association, rental restrictions may not be included in the declaration of covenants, conditions and restrictions.  Being able to rent out your property is a valuable way to use it, so in my opinion, this would have to be included in the original CC&Rs, or added by amendment, before the association can directly address leasing.  Without those provisions, a board could only address the consequential results of absentee owners with strict enforcement of landscaping and other restrictions.

This conflict of course arises also in condominium associations.  Condominium associations are often struggling to comply with updated FHA lending guidelines that will make it impossible for any buyer to get HUD lending if the ratio of rentals to owner-occupied units gets too high.  Fortunately, condominium associations nearly always have a rental provision in their declaration.   A board just needs to establish procedures to enforce that provision.






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