Are you debating allowing or restricting rentals in your Jessup HOA community?
As part of the HOA's leadership team, you are responsible for setting rules that will benefit the community. On paper, an HOA is a community of homeowners and their families. Every property is sold, not rented.
In practice, however, the property owner has every right to use their asset however they wish, including reselling or renting it out. In most jurisdictions, HOA boards can develop and enforce rental regulations in an HOA community.
So, which way should you go? This article discusses rentals in an HOA community and how they might impact you.
Diluting the Estate's Exclusivity
HOA communities are attractive to many people because of their exclusivity. The gates of your community are only open to the homeowners and their families and guests.
Allowing rentals can reduce the community's exclusivity. Imagine a scenario where about half of the estate's homes are renter-occupied. The resident homeowners will start feeling like the community is open to everyone.
Plus, another perk of HOA living is the heightened sense of neighborhood. A homeowner can develop lasting relationships with their immediate neighbors. When rentals are allowed, the prospect of a homeowner having new neighbors from time to time is high. This can kill their spirit to form friendships with neighbors.
HOA Home Value
Rentals in an HOA community can hurt home values. The exclusive nature of HOA communities makes them more attractive to prospective home buyers, which can increase the demand for HOA homes and, consequently, their value.
With an open rental policy, exclusivity and the attractiveness of the estate will disappear. With a lower demand for the HOA's homes, prices will drop.
Increased Violation of HOA Rules
HOA communities have rules that all residents must follow. Management's job is far easier when there are no HOA violations.
Although it's hardly possible to have a community without rule breakers, allowing rentals can make the situation worse. The reasoning is simple: Unlike HOA homeowners, renters don't have any vested interests in the estate. They don't care about property values or even the welfare of other residents since they know they can move out at a moment's notice.
As such, it's been established that renters in an HOA community are more likely to break the rules repeatedly. This not only makes your work harder but can also reduce the quality of life of other residents.
Restrict Rentals in an HOA Community
Allowing rentals in an HOA community is a big decision for all boards. While having a total ban is not feasible, you shouldn't have an open policy either. The secret is restricting the number of units rented out at any given time.
If you need help developing an effective policy, PMI Village Alliance can help. We're a full-service association management company serving HOAs in Jessup, MD, and surrounding areas. As part of a national property management franchise in the industry for over twenty years, we have the human resources and the technology to serve your community competently.
Get in touch today for more information.
