HOAs and Renters: Rules & Enforcement

According to a recent study by economics professors Wyatt Clarke and Matthew Freedman, 20% of Americans live in neighborhoods where homeowner’s associations supervise their property. HOAs are especially common in new housing areas. For example, HOAs are in charge of 80% of newly-built neighborhoods.

Because HOAs are so common, understanding the different ways that these organizations make and enforce rules is essential if your company sells HOA insurance policies to groups that allow renters. Use this guide to brush up on how your clients can set and enforce regulations.

Navigating the HOA Scene With Renters

Thanks to their name, most people associate HOAs with property owners. Frequently, though, people who live in HOA houses are renting their properties from landlords. In this scenario, both the tenants and the landlords must abide by their HOA’s requirements.

When a new set of tenants moves into a property that your client’s HOA oversees, they must view and sign the HOA’s bylaws and any other relevant documents. Your clients cannot simply trust that their area’s landlords will pass along everything that their tenants need to know. They also must decide whether homeowners’ rights to run for HOA board positions, vote in HOA meetings, and use group spaces such as pools and tennis courts transfer to tenants.

Understanding the Importance of Government Regulations

Understanding HOA rules starts with understanding the regulations that HOAs themselves must follow. Some states limit how high renters’ security deposits can be, while others stipulate how many people can rent a building of a certain size. Laws tend to be more complicated for rental situations because more parties are involved, so make sure your HOA clients are aware of all pertinent city, county, state, and federal laws.

Identifying Each HOA’s Bylaws

In addition to state and county guidelines, HOA rules for renters vary based on what each organization’s priorities and concerns are. Your HOA insurance clients should clearly explain their policies in their bylaws or their covenants, conditions, and restrictions documents. It’s critical that your clients know their own policies so they don’t accidentally enforce a regulation that their members haven’t agreed to. For example, if an HOA’s CC&R does not include rules about grass height, that HOA cannot penalize renters or landlords who do not cut their grass, unless the local government has its own regulations on lawn height.

Addressing Compliance Issues

If your clients have compliance issues that involve crimes or civil offenses, they should immediately contact the police. If your HOA insurance clients are having policy compliance issues, though, they should send official warnings to the landlord. Your clients should also send all fines to the landlord, who can either pay the fine or pass the bill to the tenants.

About Kevin Davis Insurance Services

For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.