Texas is home to over 21,000 homeowner associations, according to a news report published by the Fort Worth Star-Telegram. A good number of these HOAs are located in Dallas.
HOAs are typically exclusive communities to homeowners and their families, but it's not uncommon to find residents who are renters. If you're in charge of managing or making policies for your HOA, the matter of rentals in an HOA community is one that you must take seriously. Get it wrong, and your community could descend into chaos, killing home values in the process.
This article provides expert advice on how to properly handle the issue of HOA rentals.
Understand Dallas Laws
Local laws do not prohibit homeowners' associations from enforcing rental restrictions. However, while banning rentals might seem like the easy thing to do, it can open a can of worms. Homeowners have a right to use or control the use of the property, so those who feel aggrieved with the HOA's decision can challenge it in court.
As such, having a good understanding of the local allows enables you to formulate HOA rental policies that are based on a sound legal framework. These policies must be clearly indicated in the community's governing documents so that everyone interested in buying a home there is well aware of what they're getting into.
Best Practices for Rental Policies
In all likelihood, a complete ban on rentals isn't desirable for your community. But neither is having an open policy where every homeowner can rent out their property whenever they wish.
You need to find a middle ground, and that's where these best practices come in.
Implement Rental Caps
Most communities have a cap on the maximum number of homes that can be rented out at any given time. You do, however, need to develop a formula for determining the cap. Randomly placing the cap at 10%, for instance, because nearby HOAs are doing the same might not work for your community.
Draw HOA Rental Rules
You already have community regulations that every resident must observe, but they might not be adequate when the community starts accepting tenants. Bolster them with rental rules that provide for things like:
- Tenant screening
- Rental property inspections and maintenance
- Payment of HOA fees and other dues.
Address Short-Term Rentals
Unlike long-term rentals, short-term rentals present unique challenges for HOA communities. While some homeowners would like to use their properties as vacation rentals, the short-term nature of this arrangement means a high turnover of tenants/guests. Vacation guests are also notorious rule-breakers, often violating noise regulations.
A complete ban on short-term rentals can be a welcome idea in your community but always consider homeowner feedback.
Rentals in an HOA Community: Proceed Carefully
Allowing rentals in an HOA community can have positive or negative effects depending on how the management approaches the issues. With this advice, you're now well-placed to develop policies that add to the betterment of your community.
If you'd like professional help to help with the development and enforcement of an HOA rental policy, PMI Alliance is your ally. Serving community associations in Dallas/Fort Worth, our company is a proven industry leader, given that we're part of Property Management Inc., which manages over 650 associations across the nation.
Contact us to learn more about how we can improve your community.
