We purchased units in a HOA many years ago for rental purposes and potential future personal use. At that time the only rental limitation in the Master Deed was that rentals must exceed 90 days. Recently of the HOA voted to amend the Master Deed to drastically limit rentals. They specifically grandfathered in current tenants, but not current landlords. Thus, under the new provisions, if a current owner’s tenant moves out, the owner can’t rent the unit to a new tenant if more than 30% of all units in the building are rented. The owner’s options are only to sell the unit or leave it empty and get on a list of owners waiting for the number of rental units to drop below 30%. Can the H0A legally impose such rental limitations on owners who purchased their units prior to the Master Deed Amendment?
Yes, the homeowners association can legally impose such rental limitations on owners who purchased their homes prior to the master deed amendment. A homeowners association can prohibit rentals or restrict them. Leasing restrictions cannot be adopted by the Board as a rule. However, as in your case, leasing restrictions can be adopted by the homeowners through an amendment of the master deed, declaration and/or by-laws.
Moreover, leasing restrictions can be applied retroactively and there is no need to “grandfather” owners purchasing their homes prior to the amendment. This is the case since purchasers in a homeowners association should be aware that the provisions of the master deed, declaration and/or by-laws may be amended by vote of the homeowners. They either have actual knowledge or are deemed to have constructive knowledge (through the recordation of the master deed, declaration and by-laws) of the amendment provisions contained therein.