People buy real estate in neighborhoods governed by homeowners associations (HOAs) for many different reasons. In some areas, HOA properties may be the only ones currently available on the market. Other times, owners like the security that comes from having a board of local property owners overseeing the maintenance and use of residential homes near theirs.
HOAs help establish certain standards for homes, which can help keep local property prices stable. Their efforts to maintain community standards also help protect the right of individual homeowners to the quiet enjoyment of their residences.
In some cases, property owners may find themselves embroiled in disputes with the local HOA. They may have plans for their property that others find objectionable. Particularly in scenarios where someone wants to monetize a property by engaging in short-term rentals, the HOA or neighboring homeowners may take issue with that plan.
Can an HOA prevent property owners from renting their homes to others?
Nevada law addresses this exact concern
Conflicts between property owners and HOAs are relatively common, so there are numerous state laws clarifying what types of authority HOAs have and what they cannot do. HOAs can enact rules outlined in community bylaws that limit how people utilize their properties. They can impose specific expectations, including standards for yard and home maintenance. However, they cannot retroactively seek to impose restrictions on those who already own property in the community.
Nevada law prohibits HOAs from preventing property owners from renting their homes by implementing new rules after they assume ownership. Instead, they can only prohibit renting out properties in cases where community bylaws already included such restrictions when the owner bought the property.
Some HOAs have enacted rules preventing owners from renting out units entirely or requiring that the rental agreement last a minimum duration. It is therefore incumbent upon those planning to invest in real estate for short-term rental purposes to validate the rules that apply to any individual property they consider acquiring.
In scenarios where HOAs attempt to inappropriately prevent economic activity, property owners may need to prepare to take legal action against an HOA. Fighting back with litigation may be one of the only ways to prevent an HOA from interfering with attempts to lawfully monetize a residential property.
