Reader Questions - Rentals

c c & rs community managers h o a homefront reader questions Nov 24, 2014

Dear Sir,

Can the board limit the percentage of renters in a common interest development?

If a certain percentage is reached, will that invalidate our senior citizen status?

Thanks, J.P., Menifee

Dear J.P.,

Associations can limit the percentage of homes which may be rented. Such limitations are best put into CC&Rs, because major restrictions on how members use the residences should be more permanent (and approved by membership vote). Rules can be amended by the board with 30 day notice at any time, so rules created by this year’s board could be completely changed by next year’s board – and that doesn’t help anyone. If rentals exceed FannieMae and FHA project lending eligibility guidelines (50% must be owner-occupied), homeowners in the project may not receive FHA or FNMA backed loans. However, so long as the tenants (whatever percentage) meet your age eligibility requirements, an increasing number of renters should not have an effect on your community’s age restriction.


Dear Kelly,

In my HOA I reside between two home businesses, one residence operates a “board and care” the other operates as a bed and breakfast inn, advertised on internet websites. There is also a “party house” around the corner which rents out to private parties throughout the year. What can the HOA do about compliance with their regulations?

P.L., Cathedral City

Dear P.L.,

Your CC&Rs probably contain a general statement that homes in your association are to be used for “residential” purposes only. The usage you describe sounds more like hotel and banquet hall usage, and that might be prohibited. Permitted uses can also become problems if they create a nuisance for neighbors. Such activities can strain association resources and facilities and create a nuisance for the neighbors. This could bring disciplinary or other action by the association or legal action by any member.

The board has many options in reining in such activities, but should start by talking to the offending owners, and explaining the importance of the community’s residential, non-profit, nature.


Dear Kelly,

Our CC&R’s are in the process of being changed to limit rentals of condominiums to 45%. We are in our eighties and hope to sell soon and move to a place without stairs. The proposed CC&R’s will require owners who wish to rent their units to be on a waiting list, and new buyers would have to live in the unit at least one year before being put on that list. Currently, our complex has been getting sales to mostly investors. If we could only find a buyer who wanted to rent out the unit, what recourse, if any, would we have?

J.F., San Diego

Dear J.F.,

I assume your association is trying to preserve its FHA/FNMA eligibility, so better loans are available for members. Real estate agents may have an opinion about whether that helps your ability to sell your condominium.

If the membership approves the amendments, they would be enforceable, but not against you. Civil Code 4740 protects your future right to rent, because under this Section a rental cap applies only to future owners. If you discover that only investors want your condominium, ask a Realtor® if maybe renting it out yourself would be an option.


Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at All rights reserved®.