Restricting Rentals during COVID-19

Residents and HOAs alike are worried about the pandemic, and rightfully so. With reports changing daily it is hard to tell whether we’re in the clear or not when it comes to COVID-19. One thing HOAs and condo associations have done to prevent the spread of the disease and limit unknown people and variables from entering the community is to ban short-term rentals, as well as other rental bans.

This is a safe and smart move and should be well within the rights of the HOA or condo association. As long as the association is following CDC, state and local guidelines, they should be legally in the clear. But it’s always a good idea to review your CC&Rs and bylaws or have a practiced community law attorney review your documents to make certain you are within your right.

As the board well knows, just because you are implementing best practices to keep everyone safe and sound, it may not be popular with everyone in the community. One HOA in particular was dealing with a very upset resident who was worried that because of the pandemic restrictions, he would lose out on months of rent. The HOA was not without compassion for this unit owner, but the safety of the community must take priority. Safety is ultimately what the restrictions boil down to.

But even without a looming pandemic HOAs and condo associations are able to restrict rentals for various reasons. In an attempt to mitigate components that can influence the quality of life and property values rental restrictions and bans can occur.

One thing to remember is that a big part of the HOA’s job is to make sure the entire condominium or housing complex remains FHA or Fannie Mae approved. This approval ensures that people can get conventional loans to buy in the complex. Without this approval the association is in danger of losing potential owners and seeing property values plummet. There are a number of criteria that must be met but one is the meeting specifications for the percentage of owner-occupied units. And in order to ensure that enough owners are in the complex, rental bans and restrictions must be applied.

It may not always be easy or pretty, but an HOA and condo association serves the greater good of the community. If that means rental restrictions or bans, they are within

their rights to enact certain limits. If you are facing pushback or are unsure if you can legally impose the restrictions you are proposing in your community, don’t hesitate to reach out. Community law is what we do and we are here to serve you.