The immediate or future intent of investors, vacation home residents and even full-time residents might be the option to lease their homes if the need arises. Do you think it's possible to be restricted from renting your home either seasonally or yearly? You own the property so why shouldn't you be able to fully control how the home is occupied. Well, beware because renting your home may be forbidden.
In Arizona for example, most communities built after'90 are in master planned communities and have Homeowners Associations in place. Also called HOA's, these associations have rules and restrictions known as Covenants, Conditions ... Restrictions (CC...R's). These rules are specific as to how the homeowner may alter or use the land and the property.
These CC...R's are provided to you prior to purchasing the home and should be read carefully. Usually anything that can be seen from outside can be controlled by the HOA. A bench in the front entry or even window coverings is two good examples. The HOA rules can regulate what plants and trees are allowed in your yard, the paint color of your home and even if you are allowed to lease your home. Some buyers request specifically from their real estate agent, to see only homes in non-HOA communities but these types of developments are far and few between.
Some CC...R's restrict owners from renting their homes. Some rules state that the property cannot be vacant for any length of time. Most homeowners are aware of the restrictions. During the real estate boom in 2004-2005 many new home builders would not allow someone to buy a home unless it was their primary residence. Even though many homeowners were aware of their responsibilities, the housing crashed left the homeowners no other choice but to break some of these rules. Of course, it was unintentional.
Rental properties have often been associated with higher crime rates, declining values and homes that are not maintained. Although this is a perception by most, it is usually not common in every community with rental homes. But a couple of bad apples ruin the bushel.
The declining Real Estate market and the unemployment statistics are leaving many homeowners with no other option than to try and rent their homes. The Homeowners Associations are frantically trying to find ways to amend their rules to prevent this from happening. Can the HOA's do this legally? Does the homeowner have any say in the matter?
Most states have laws clearly stating that if you reside in a Homeowners Association that has CC...R's, there is a contract between the property owner and the Homeowners Association. When you execute your purchase, the imposed restrictions are binding. Hence, you must follow the rules.
The issue with amending the CC...R's after the purchase may be difficult but it can be done. When purchasing a home in a Homeowners Association, read the documents carefully. Consider the long term effects of the restrictions and how they may apply to your investment strategy. - 31821
In Arizona for example, most communities built after'90 are in master planned communities and have Homeowners Associations in place. Also called HOA's, these associations have rules and restrictions known as Covenants, Conditions ... Restrictions (CC...R's). These rules are specific as to how the homeowner may alter or use the land and the property.
These CC...R's are provided to you prior to purchasing the home and should be read carefully. Usually anything that can be seen from outside can be controlled by the HOA. A bench in the front entry or even window coverings is two good examples. The HOA rules can regulate what plants and trees are allowed in your yard, the paint color of your home and even if you are allowed to lease your home. Some buyers request specifically from their real estate agent, to see only homes in non-HOA communities but these types of developments are far and few between.
Some CC...R's restrict owners from renting their homes. Some rules state that the property cannot be vacant for any length of time. Most homeowners are aware of the restrictions. During the real estate boom in 2004-2005 many new home builders would not allow someone to buy a home unless it was their primary residence. Even though many homeowners were aware of their responsibilities, the housing crashed left the homeowners no other choice but to break some of these rules. Of course, it was unintentional.
Rental properties have often been associated with higher crime rates, declining values and homes that are not maintained. Although this is a perception by most, it is usually not common in every community with rental homes. But a couple of bad apples ruin the bushel.
The declining Real Estate market and the unemployment statistics are leaving many homeowners with no other option than to try and rent their homes. The Homeowners Associations are frantically trying to find ways to amend their rules to prevent this from happening. Can the HOA's do this legally? Does the homeowner have any say in the matter?
Most states have laws clearly stating that if you reside in a Homeowners Association that has CC...R's, there is a contract between the property owner and the Homeowners Association. When you execute your purchase, the imposed restrictions are binding. Hence, you must follow the rules.
The issue with amending the CC...R's after the purchase may be difficult but it can be done. When purchasing a home in a Homeowners Association, read the documents carefully. Consider the long term effects of the restrictions and how they may apply to your investment strategy. - 31821
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