Insight

Homeowner Associations Push Back Rental Investors

Homeowner Associations Push Back Rental Investors

Roy D. Oppenheim

Roy D. Oppenheim

May 10, 2022 10:49 AM

There is a rise in homeowner associations attempting to block investors from purchasing residential properties for rental purposes. These groups claim that, by having companies buying rental properties, has actually led to a decline in property maintenance, making their neighborhoods less attractive and potentially lowering their property values.

While homeowner associations typically enforce rules found in their documents, such as overall house appearance and lawn care, many also have broad powers as to regulating how homes are used. Some homeowner associations may place a cap, for example, on the number of homes that may be rented in a particular area, and usually require rental tenants be first approved by the association.

How do investor residential purchases effect the housing market?

With the housing market still facing more demand than supply, investors are paying cash for homes intended for rentals. According to housing research from CoreLogic, investor purchases accounted for more than one in five home sales in December. The effects of this on the housing market has major implications as potential home buyers are unable to compete with all cash offers.

This also creates a divide between home purchasers and renters. Blocking investor groups from purchasing homes in a homeowner association community may inevitably hurt renters who struggle to find affordable housing. Since 2019, approximately 30% of the more than 1,000 Homeowner Association documents in twenty-one counties in Florida, Arizona, North Carolina, and Texas contain leasing and usage restrictions, including restriction on short-or long-term rentals according to InspectHoa, a real estate technology company—which is an increase from 21% filed in the same counties from 2016 to 2018.

To counter such restrictions, the real estate industry has worked to pass legislation in Florida that prevents associations from retroactively banning investors that already purchased and rented houses in homeowner association communities. This does not mean, however, that the associations could not prevent future purchases with restrictions. In addition, there are homeowner associations that are simply passing new rules to prevent investor groups from being able to purchase homes for rent.

What does this all mean?

With interest rates rising, home ownership for potential buyers may becoming more and more out of reach. As a result, would-be purchasers may opt to rent. Although investor companies have purchased homes in association neighborhoods, many associations are attempting to prevent investor groups from purchasing homes intended to be rented in their neighborhood. Investor groups may look to purchase properties in more rural or suburban areas that do not contain homeowner associations or just develop their own rental communities. Either way, both the definition and the demographics of what constitutes a “neighborhood” will continue to evolve.

Stay tuned!

Roy Oppenheim

From The Trenches

originally posted at: https://www.oppenheimlaw.com/news-resources/homeowner-associations-push-back-rental-

Related Articles

There’s Hope for the Canadian Real Estate Market Post COVID-19


by Steven Tulman

Clover Mortgage offers advice and predictions on the Toronto real estate market as we move on post-pandemic.

Canadian Real Estate Market Post COVID-19

The Partnership Opportunity


by David Harley, Shaun Whittaker, Tony Rutherford, and Troy Lewis

Doing well and doing good need not be mutually exclusive. Housing developments that provide both solid long-term returns and positive social outcomes, often through public-private partnerships, are an idea whose time has come throughout Australia.

Housing Developments in Australia

Making Auckland the World's Most Livable City


by Ed Crook

Auckland, Soon to be the Most Livable City

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Presenting the 2025 Best Lawyers Editions in Chile, Colombia, Peru and Puerto Rico


by Jennifer Verta

Celebrating top legal professionals in South America and the Caribbean.

Flags of Puerto Rico, Chile, Colombia, and Peru, representing countries featured in the Best Lawyers

Unveiling the 2025 Best Lawyers Editions in Brazil, Mexico, Portugal and South Africa


by Jennifer Verta

Best Lawyers celebrates the finest in law, reaffirming its commitment to the global legal community.

Flags of Brazil, Mexico, Portugal and South Africa, representing Best Lawyers countries

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background

The Human Cost


by Justin Smulison

2 new EU laws aim to reshape global business by enforcing ethical supply chains, focusing on human rights and sustainability

Worker wearing hat stands in field carrying equipemtn

Beyond the Billables


by Michele M. Jochner

In a recently conducted, comprehensive study, data reveals a plethora of hidden realities that parents working full-time in the legal industry face every day.

Women in business attire pushing stroller takes a phone call