HOA won't let you rent out your home
I have a rental property in a nice neighborhood with a HOA that I picked up in two years ago. The HOA just adopted some new rules that make it difficult to be a landlord.
First of all any prospective tenant and lease must both be approved by the HOA. They also want private tenant information such as phone numbers, emails, drivers licenses. I'm not sure how my prospective tenants would feel about sharing this with a HOA.
I also wonder what their turn around time is? Hours, days, weeks? I'm betting it will be the latter. So now my rental sits on the market waiting for the HOA to approve a tenant and 2 weeks later when they say no I have paid 2 weeks holding costs. I might try again, and again, and again. At what point, 2 months holding costs?, do I give up and sell the property.
They also reserve the right to evict your tenant for whatever reason. I wonder how this would fly in court? I know I certainly cannot evict my tenant without cause.
There are many more little dictatorial rules but the one that I found most egregious is that when you purchase a property in this neighborhood you cannot lease it out for a period of 12 months!
That is going to stop any landlord from buying there. Or more likely it will screw any landlord that does buy there because how many investors actually demand a copy of the HOAs CC&Rs during their due diligence period.
The HOA is making bad policy in my opinion for two reasons. One, you cannot keep out sex offenders and criminals from buying a property (unless of course that is in their CC&R's too?) and any landlord worth their salt does these checks themselves. But two, and most importantly, when the housing market turns down and the neighborhood starts filling up with foreclosures who is going to swoop in to put a floor under the market prices in that neighborhood? Typically this would be investors and unless the properties are distressed more likely they would be buy and hold landlords.