Having to deal with community members who rent out their properties comes with the territory of being a community Board Member. The frustration that an unruly tenant creates can be a tricky situation to deal with, so knowing how to approach these issues can help Board Members avoid a potential nightmare.
The Rental Policy
It’s important to note that the HOA has no authority either to enforce rules or to levy fines directly on tenants.
The responsibility of managing a tenant falls solely on the owner of the property. Owners, in turn, are then held responsible by the HOA. This means that the HOA can fine property owners for violations committed by their tenants. However, we don’t suggest this as a default response to community violations.
Instead, the HOA should allow the owner the option to handle the situation on their own. Owners should include the community’s Governing Documents in their rental agreement, and make it understood to tenants that a violation of those Governing Documents also violates the rental agreement. Any infraction of the rental agreement could result in the tenant’s eviction.
Rental Restriction Policy
A Rental Restriction Policy should be in place to help protect the community from having more rental properties than full-time residents. This becomes an issue when the number of rentals exceeds roughly one third of the total number of properties inside the community.
It’s important that the Board moves forward with the creation of such a policy with the help of an attorney who specializes in homeowner association law.
Minimum Rental Periods
The idea behind minimum rental periods is to restrict or prevent any short-term rentals. There should be a minimum one-month contract required for the rental of properties within the community. This is especially pressing with emerging platforms like AirBnB and HomeAway becoming popular. The community should not turn into a hotel.
In order to keep things above board, the HOA should require the owner of the house or unit to provide the community Board with the following pieces of information about the tenant:
- Name and contact information of the tenant.
- Vehicle information.
- Copy of rental agreement.
Ensure that the Governing Documents allow you to make reasonable rules and regulations regarding rentals.
The HOA’s rental policy should be the first line of defense for the community against an unwanted tenant. Your members should have the right to rent their property out, but they need to make sure that the tenant is aware of the community guidelines and rules, and that they are prepared to abide by them.
On a final note, it’s important for the HOA and other community members to treat tenants as though they are actual owners and not second-class citizens.