Rentals in an HOA Community: Are they Allowed in Tacoma, Washington?

Rentals in an HOA Community: Are they Allowed in Tacoma, Washington?

HOA living is an attractive prospect for renters and homeowners alike. So if you own property in an HOA community, you'll have no trouble finding tenants to snap it up.

That's especially true in places with low rental vacancy rates, like Tacoma, where lawmakers are eager to mitigate the housing crisis. HOAs aren't above the law when it comes to prohibiting rentals, but they do have certain freedoms.

Find out everything you need to know about rentals in an HOA community, here.

Laws Surrounding Rentals in an HOA Community

Every HOA has a set of CC&Rs (covenants, conditions, and restrictions) managed by an elected HOA board. These regulations control certain aspects of community life and may forbid rentals of any kind.

If you bought a home in an HOA where the CC&Rs prohibits rentals, you must comply with this restriction. An HOA may only change these limitations after following the correct process.

These are the steps involved:

  • Proposing the change to the HOA board
  • Holding an HOA homeowners meeting to discuss the proposal
  • Homeowner's vote by secret ballot
  • The change is either approved or denied
  • Amending the CC&Rs

In cases where legislation demands a change, there will be no vote, but the HOA board will hold a meeting to explain the necessary changes.

HOA Rental Caps

The only way to determine whether an HOA allows rentals is to review their CC&Rs. In some cases, the HOA may place a cap on rentals.

This means that only a certain percentage of units may be tenant-occupied. Find out how close they are to reaching this cap before you buy a property in an HOA intending to rent it.

Some HOAs allow family members to occupy your unit, so you could rent it to your children or parents. Others only allow occupants whose names appear on the deed.

In all instances, an HOA may insist that you carry out screening on all HOA tenants before you rent your home.

You must check all these details before you buy an investment property in an HOA. If you try to get around the CC&Rs and get caught, you could face heavy fines.

An HOA can place a lien on your house due to unpaid fines and HOA fees, so you must know exactly what you're getting yourself into.

Short-Term Rentals

In most cases, short-term rentals aren't allowed in HOA homes. Most homeowners feel that short-term tenants have no vested interest in preserving the value of an HOA property and following the rules.

A few HOAs will allow short-term rentals, subject to certain provisions, such as time limitations. Others won't allow you to benefit financially from owning a home in their community.

Renting Your Home in an HOA

If you are one of the lucky homeowners who can benefit from rentals in an HOA community, it's wise to enlist the help of a property manager. PMI Cascade is familiar with all the laws surrounding HOAs and tenant rentals.

We can add valuable insights and experience to your investment property experience. Get in touch today to see how we make a difference for Tacoma landlords.