Understanding Your HOA's Rental Cap Policy
A rental cap is a set limitation on how many homes in the neighborhood can be rental properties. Not all HOAs have rental caps and those that don't always have the exact same policies. That said, it's important to know your HOA's rental policies, if any, before either buying a home in the neighborhood or choosing to renovate a former home into a rental property in the neighborhood. The reason rental caps are a highly contested policy is that, with a static limit, only the first few homeowners who decide to rent out their properties will be able to.
Pros and Cons of a Rental Cap
Of course, there are some good reasons for a rental cap which is why they're enacted in the first place, along with strong arguments against them. Before you decide on your position in the matter, it helps to understand how a rental cap might help or harm a neighborhood.
Rental Cap Pros
Rental Cap Cons
Can You Change Your Neighborhood Rental Cap?
If you find yourself in an HOA that has already reached its rental cap but wants to rent out your property, the good news is that no HOA policies are written in stone. These are agreements between the owner-members themselves and going through the correct procedure can always enact change.
The most peaceful way to change your local rental cap policy would be to get involved in the HOA, build support for the change, and ask the board to amend the policy so that better policies can be adopted that please the current collection of neighborhoods homeowners. If your HOA and/or neighbors don't want to change, your association board can also potentially hire an HOA attorney to investigate the original amendment process that made the policy in the first place.
In most neighborhoods that have this policy, a rental cap is put into place to protect the local home values and ratio of homeowners and renters in residence. However, as times change, it may be more appropriate to raise or abolish the policy so that the neighborhood can continue to thrive with owners able to buy, sell, and lease their houses as they choose to. In other neighborhoods, the population may have changed considerably since the policy was put into place and attitudes have since changed. No matter where your local HOA stands on the issue, make sure to check the rules before planning a rental property in the neighborhood. For more helpful tips on HOA policy, please contact us today!