Can HOA ban tenants? Rentals, especially short-term rentals, are often disliked by HOAs and condo associations. They disrupt community stability, increase wear and tear on association property, and bring security concerns. That said, before banning rentals altogether, associations in Maryland must take a few things into consideration.
Can HOA Ban Tenants?
There are two things that can dictate an association’s authority to ban rentals: state laws and the governing documents. In Maryland, neither the Homeowners Association Act nor the Condominium Act expressly allows or prohibits rental restrictions.
Associations would have to turn to their governing documents for guidance. Rental restrictions must typically appear in the CC&Rs to be enforceable. Boards can’t just take a vote amongst themselves and pass a resolution.
That said, an association can potentially ban rentals altogether. Provided the governing documents allow it, a complete prohibition on rentals can be enforceable.
Can HOA Prohibit Renting After Purchase?
Maryland law neither allows nor prohibits an association from banning rentals after an owner purchases a home. Instead, this is largely covered by the governing documents, particularly the CC&Rs.
In general, an association can amend its CC&Rs to add or tighten rental restrictions. Amendments must strictly follow the procedures under Maryland law and the governing documents themselves.
According to Section 11B-116, associations must obtain membership approval to amend their governing documents. At least 60% of homeowners in good standing must vote to approve the amendment (or a lower percentage as required by the CC&Rs).
Can an HOA Ban Rentals Mid-Lease?
Sometimes, an HOA will want to prohibit or restrict rentals even as some owners are already renting out their homes. This is where grandfathering often comes into play.
Many associations choose to grandfather existing landlords by allowing them to continue renting. The new restriction will then only apply to future buyers and/or owners who weren’t renting when the amendment took effect. If a rented-out home is sold to a new owner, the restriction will apply, which means the new owner can’t lease the home again.
The grandfathering approach minimizes legal challenges for the association. It avoids immediately taking away an existing use of the property, resulting in fewer complaints.
That said, grandfathering is not expressly required by Maryland law. Instead, associations must look to their governing documents and the language of the amendment. Past court decisions can also determine the issue.
Can HOA Restrict Rentals?
Generally, yes, provided the restrictions are in the governing documents. While these restrictions can vary depending on the community, common ones include the following:
1. Rental Caps
Can HOA limit rentals? If the governing documents permit it, an association can enforce rental caps. This limits the number or percentage of homes or units that can be rented out at the same time.
With a rental cap, an association can keep owner-tenant ratios under control. Lenders and insurance carriers often offer less favorable terms to communities with a large number or percentage of renters, as they pose more significant risks.
2. Minimum Lease Terms
An HOA or condominium may allow rentals but only those that are at least 30 days long. Many associations prohibit short-term rentals or vacation rentals such as Airbnb.
3. Owner-Occupancy Requirements Before Leasing
To prevent institutional investors from taking over the HOA, many communities enforce minimum owner-occupancy requirements. This means that an owner must reside within their home or unit for a set number of years before they can rent it out.
4. Tenant Screening
Associations typically require owners and landlords to screen their tenants. This includes conducting a background check, speaking to past landlords, and verifying credit scores.
5. Leasing Permits
Some municipalities require landlords to secure permits before leasing out their homes or units. Communities must confirm that owners comply with local regulations.
6. Registration
Boards can require owners to register their leases and tenant information with the association. This helps the HOA or condo keep track of the number of renters in the community. It also allows the board to contact the renter at any time.
7. Owner Responsibility for Rule Violations
Tenants are not exempt from the community’s rules and standards. If a tenant breaks a rule, the association has the authority to take enforcement action after notice and an opportunity to be heard. The owner/landlord must take responsibility, shouldering fines and other penalties.
Can HOA Restrict Renters?
The types of restrictions an association can place on renters will depend on the governing documents. That said, it is important to strike the right balance between renters’ rights and preserving the community’s standards.
Can HOA Ban Tenants From Accessing Amenities?
In general, an association can ban tenants from accessing amenities, provided the governing documents allow such a prohibition. Owners typically have the inherent right to use the amenities, but tenants don’t have the same guarantee.
That said, many associations allow owners to transfer their amenity privileges to tenants during the lease. Others require tenants to register before using amenities. Suspension of amenity use can also be a penalty if a tenant violates a rule.
Of course, it would be wise not to ban tenants from amenities altogether. As long as they follow the rules, there should be no problem in letting tenants use the pool, clubhouse, fitness centers, and other facilities.
Can HOA Ban Tenants From Voting?
Voting rights generally belong to the owner, not the tenant. In Maryland, both the Homeowners Association Act and the Condominium Act consistently refer to “lot owners,” “members,” or “unit owners” as the persons entitled to vote. The exception, of course, is if the governing documents specifically allow tenants to vote.
That said, in many communities, proxy voting is permitted. An owner can designate their tenant as the proxy, indirectly giving the tenant voting rights.
Can HOA Ban Tenants From Attending Meetings?
In general, an association can ban tenants from attending meetings depending on the type of meeting and the owner’s authorization. For HOAs and condos, meetings must be open to all members of the association and their agents. Owners can assign their tenants as their agents to attend the meeting on their behalf.
Some associations give tenants the right to attend meetings, even as non-agents of the owner, especially if the tenant is on a long-term lease. As a resident of the community, the tenant may be invested in the association’s affairs and want to stay in the loop.
Can HOA Ban Tenants? Explained!
Compared to other states, the rental restrictions in Maryland are not as specific. Associations must generally rely on their governing documents to understand if they have the authority to ban rentals or enforce restrictions. Board members must tread carefully and seek legal advice to avoid liability.
Keymont Community Management offers expert management services to associations in Virginia, Maryland, and Washington, DC. Call us today at 703.752.8300 or request a proposal to start your journey!
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