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
8. This restriction is effective December 12,2006.