HOA ~ Gestapo or Godsend?

I received an email from a client who posed the following question:

"Now that the builder [of her townhome subdivision] has turned the complex over to the residents [homeowners], there is talk of changing the CCR's to prohibit rentals. Can they do that?"

Over the years, I've heard many comments from homeowners about their Homeowners Association (HOA). Often times, those comments were quite harsh, but not always. Many of my clients absolutely LOVE their HOA's, and appreciate the fact that an HOA can help prevent neighbors from painting their houses pink & purple, and can do something to help prevent the neighborhood from becoming a junk yard. But then again, I've had clients who referred to their HOA's as being like a Nazi Gestapo ~ a comparison that is arguably exaggerated and perhaps not the most 'politically correct' statement ~ but it nonetheless summarizes what they perceive as heavy-handed and irrational operations by HOA's.

The most important point I could make is that homeowners under the umbrella of an HOA need to realize that "they" are "we". Most HOA's are managed on a representative democratic model (similar to our United States government model). The homeowners elect a Board of Directors (from homeowners in the HOA), and then the Board oversees/manages the funds, CC&R's, common area maintenance contracts, fees, assessments, etc. The Board may contract with an outside Property Management firm to administrate and enforce the Board's decisions, CC&R's, etc., but ultimately, it's the Board that basically calls the shots.

So to answer my client's question about whether her HOA can restrict rentals in her subdivision, the answer is a resounding YES! Changes and restrictions of that magnitude are usually brought to a vote by all of the current homeowners, but it's the Board that is usually the 'rudder of the ship'. The actual procedure should be spelled out in the HOA's bylaws, but if the issue is not addressed in the HOA's bylaws, then such changes in CC&R's can be implemented by the Board.

Best advice? Attend HOA meetings, read HOA newsletters and websites, communicate regularly with HOA Board members, and otherwise do whatever you need to do to ensure that you are aware of and involved in your HOA activities, plans and operations, and that you let your voice be heard! Failure to do so is an invitation to disaster. Remember, "they" are "we".

...randy