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Thread: Do any of your subdivisions prohibit rentals or leasing of homes?

  1. #1
    Cyburbian Streck's avatar
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    Do any of your subdivisions prohibit rentals or leasing of homes?

    A subdivision in our community recently won its case in court to ban rental or leasing of dwellings.

    Do any of your subdivisions have the same provision? Has it been tested in court?

    Here is the language in the subdivision that was upheld by the court:



    Pursuant to Section 4.02(d) of Article IV of the Declarations of Covenants, Conditions and
    Restrictions for Northbay that grants the Board of Directors powers to adopt, promulgate, and
    enforce such rules, regulations restrictions and requirements as the Board of Directors may
    consider to be appropriate with respect to the lots, leasehold interests, and improvements on the
    lots, including dwellings; and Section 13.02 (iii) of Article XIII of the Declarations of
    Covenants, Conditions and Restrictions for Northbay that grants the Board of Directors powers
    to adopt and promulgate rules and regulations from time to time concerning the leasing of a
    dwelling for residential purposes; and all other enumerated and inherent powers of the Board of
    Directors the following rules, regulations and restrictions are adopted:

    1. For purposes of this restriction, an "owner" is the person(s) or entity(s) that holds fee title
    to a lot, or a leasehold interest in a lot. "Subdivision" means that real property described in
    of the Declarations of Covenants, Conditions and Restrictions for Northbay as recorded
    at Book 633 at Page 84 of the records of the Chancery Clerk and any supplements or additional
    property added thereto persuant to Article II thereof.

    2. All dwellings, and any parts thereof, within the subdivision shall be owner occupied.

    3. No dwellng, or any part thereof. may be rented or leased to others by the owner of the
    lot, or by any other person or entity after December 12, 2006.

    4. Dwellings, or parts thereof that are being leased or rented by the owner on or before
    December 12, 2006, may continue to be leased or .rented by the owner only until the end
    of the current term of the lease or rental agreement. After the expiration of the current
    term of the lease or rental agreement the dwelling, and any part thereof, may not be
    leasted or rented to any person or entity.

    5. The Board of Directors may take any steps necessary to enforce this restriction, including
    but not limited to legal action, reference to the city, and fines as provided hereinafter.

    6. The Board of Directors is authorized to fine any owner or lessor of dwellings that violate
    the terms of this restriction $200.00 per month, which fine shall constitute a lien against
    the lot. Such fine shall begin to accrue 60 days after the Association has mailed notice af
    the violation of this restriction to the record owner of the lot by certified mail, if the
    violation has not been corrected in that time, and shall continue to accrue monthly until
    the violation is corrected.

    7. Each and every section of this restriction, and every portion thereof, is separate,
    severable, and not dependent upon other provisions of this restriction. In the event that
    any section of this restriction, or any portions thereot: are held to be invalid, then such
    finding of invalidity shall not affect the validity and application of other sections and
    portions thereof.

    8. This restriction is effective December 12,2006.

  2. #2
    Cyburbian Cardinal's avatar
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    It is not at all uncommon to see covenants that prohibit rental units in condominium dwellings, although less common with single family homes. I have also seen prhibitions for use of condo units as year-round dwellings in some of the ski towns of Colorado. That one struck me as odd.
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  3. #3
    I know several subdivisions and condominiums that prohibit or restrict leasing. These restrictions are found in the CCR that the homebuyers agree to when they purchase the home. Unfortunately, not everyone reads all the documents. It's a civil matter, and not a municipal planning issue. Disgruntled homebuyers may sometimes try to bring the city involved.

    I don't want to say this is a common practice, but I thought this was an established practice that's been in place for years.
    The content contrarian

  4. #4
    Cyburbian Kingmak's avatar
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    Nothing unusual here. Where you run into issues is when these restrictions violate Fair Housing laws, but even that is a civil matter.
    "The first rule of sustainability is to align with natural forces, or at least not try to defy them." - Paul Hawken

  5. #5
    Cyburbia Administrator Dan's avatar
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    Around here, it's very common. It even gets raised a lot during review of new hosing development; planning board members and elected officials often demand that the units have deed restrictions banning rental. Why? When the population of the community increases by 50% every fall, many fear the conversion of neighborhoods into student ghettos.

    The resistance to rentals is a big problem for working townies, because vacancy rates are very low, rents are very high, and leases almost always tied to the academic year. Also, for those working in academia, it means they can't rent their houses or condos out while they're on sabbatical.

    Affordable housing close to town is hard to come by. I'm thinking about buying a townhouse in a complex that is somewhat close to work, where the units are quite affordable by local standards ($125K-$150K for 2BR/1BA, 1000 sq ft units). The complex bans rentals. I might just resort to "drive to qualify", and end up being another hypocritical urbanism-advocating planner who lives on acreage in the boonies.
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  6. #6
    Cyburbian hilldweller's avatar
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    Wouldn't the equal protection clause come into play here?

  7. #7
    Cyburbian Raf's avatar
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    Quote Originally posted by hilldweller View post
    Wouldn't the equal protection clause come into play here?
    That was my rationale as well. For CC&Rs for Del Webb/Plute Sun City developments, we had "age restricted" housing, but it never clarified that it was rental/ownership units, simply that the resident meet 55+ age requirements.
    Men do dumb $hit... it is what they do to correct the problem that counts.

  8. #8
    Cyburbian mgk920's avatar
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    Quote Originally posted by Dan View post
    Around here, it's very common. It even gets raised a lot during review of new hosing development; planning board members and elected officials often demand that the units have deed restrictions banning rental. Why? When the population of the community increases by 50% every fall, many fear the conversion of neighborhoods into student ghettos.

    The resistance to rentals is a big problem for working townies, because vacancy rates are very low, rents are very high, and leases almost always tied to the academic year. Also, for those working in academia, it means they can't rent their houses or condos out while they're on sabbatical.

    Affordable housing close to town is hard to come by. I'm thinking about buying a townhouse in a complex that is somewhat close to work, where the units are quite affordable by local standards ($125K-$150K for 2BR/1BA, 1000 sq ft units). The complex bans rentals. I might just resort to "drive to qualify", and end up being another hypocritical urbanism-advocating planner who lives on acreage in the boonies.
    'Drive to qualify'....

    I once knew someone who studied at Cornell and commuted from a really, truly, utterly, absolutely crappy rental house in Moravia (near the south end of Owasco Lake). That's 30-45 minutes one-way on mostly backroads.

    IMHO, this is a sign of a market breakdown caused by the local zoning controls.

    Mike

  9. #9
    Cyburbian wahday's avatar
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    Our situation has never been tested in court, but I work for a community land trust and we do have restrictions on renting or subleasing homes (though we do also have rental housing on the trust land). Homes can be rented to immediate family members and homeowners can apply for exceptions in hardship cases (had a situation with someone being deployed, for example) but otherwise it should be owner-occupied.

    The reason for this may be a little different than others, though, as we have public money in play (federal HOME funds). Its actually our municipality, through which the funds flow, that put this rental restriction in place. Its now integrated into the ground lease that all homeowners sign when purchasing. For us. the organization I work for owns the land and the homeowners own the improvements (house). They essentially "rent" their yard from us but the cost is minimal. This is how we create permanently affordable housing. We also restrict the resale of the homes to pass on the affordability to subsequent buyers so in that sense its like a deed restricted property. In general, its a type of "shared equity" housing.

    Because we exist primarily to promote homeownership for folks that otherwise may not be able to afford it, allowing subleasing of homes works against that goal. But really the most important reason for the restriction is the federal subsidies that are attached to the home. Not very fair to get into a home with public subsidy, then move into a cheaper apartment and sublet your home for profit....
    The purpose of life is a life of purpose

  10. #10
    ^ sounds like an innovative method to preserve housing affordability. It's a different take on the rental prohibitions found in private homeowner's association. I'm also surprised to hear that there are planning commissioners out there insisting that new subdivisions have deed restrictions prohibiting renting. Fair Housing???
    The content contrarian

  11. #11
    Cyburbian wahday's avatar
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    Quote Originally posted by OfficialPlanner View post
    I'm also surprised to hear that there are planning commissioners out there insisting that new subdivisions have deed restrictions prohibiting renting. Fair Housing???
    If the purpose for the deed restriction is to create and maintain a stock of affordable housing, that makes sense to me. At the same time, there are deed restricted properties for affordable housing purposes that do allow renting but the renters must fulfill certain income requirements. You see this in resort towns trying to create viable housing options for workers (some of whom are seasonal and would not be looking to buy a home).

    I also think that owner-occupied restrictions can be an (over)reaction to areas that have seen decline in housing quality and neighborhood investment because of absentee landlords. Iím not saying itís the correct solution, but I know when I was working on Sector Development Plans for our City in hard hit areas, many residents were concerned about the high percentage of absentee landlords. Indeed, the poorest areas in my town are dominated by single family detached homes that are not owner-occupied. You can look at a map and guess the lowest income areas just based on this alone. Folks proposed owner-occupancy restrictions while also allowing renting in accessory dwellings. I left that firm before these two plans were completed, so I donít know if that made it into the final draft, but I doubt it. These were pre-existing neighborhoods, not new subdivisions.

    I would agree that, public subsidy and affordable housing issues aside, these kind of requirements could tread on fair housing issues and serve as a form of discrimination Ė keeping ďthose peopleĒ out of the hood by setting requirements (minimum lot sizes, minimum square footage and rental restrictions) that make it so only those of a certain income can afford to live there. Still, I don't think it is that uncommon as part of an HOA's CC&Rs.
    The purpose of life is a life of purpose

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