Question: What are the rules about renting out a home governed by a common interest development (CID), such as a condo?
Answer: Many laws exist in California to protect a homeowner’s right to rent out their unit, but it’s best to check the CID documents before purchasing a CID unit you intend to use as a rental.
What is a CID?
A CID is a condominium project, cooperative or group of single family residences (SFRs) in a planned development. CIDs consist of individually-owned units, all with access to shared common spaces and facilities. They are self-governed by a set of rules everyone agrees to when purchasing their home, called covenants, conditions and restrictions (CC&Rs).
CC&Rs are recorded against title to a CID unit and place restrictions on an individual unit owner’s right to use their property. Further, the CC&Rs bind all future owners to comply with the CC&Rs since the use restrictions they contain run with the land, not the owner.
Rules governing how a condominium owner may use their unit and the rights and responsibilities of the CID are contained in a declaration of CC&Rs filed with the condominium subdivision plan.
How do I know if my CID prohibits renting out their units?
The answer is simple: read your CC&Rs!
HOAs are able to choose whether to allow or prohibit the rental of an individual owner’s unit. They are also able to choose whether to place restrictions on renting.
For example, a CID might require an owner to live in the home for a set number of years before they are allowed to rent it out. Renting may be allowed as long as the lease term is for a certain length of time. Or, renting may be prohibited altogether.
When reading your CC&Rs, always check the documents that were in place at the time of purchase. If your original CC&Rs allowed renting but they have since been amended, the unit may be rented as allowed by the CC&Rs in place at the time of purchase. [Calif. Civil Code §4740]
What happens if I don’t follow my HOA’s rules?
California law allows HOAs to enforce CID rules under the Davis-Sterling Common Interest Development Act. [CC §4000 et seq.]
When a member of the CID acts against the CID’s rules, the HOA may choose to penalize them as stated in the CC&Rs. This penalty often includes paying a fine. But sometimes the member disagrees with the HOA’s assessment and refuses to pay the penalty.
When this happens, the HOA and the member need to go through an alternative dispute resolution process with a neutral third-party. [CC §5930]
If the member and the HOA still don’t reach an agreement, they may go to court in an effort to enforce the CC&Rs. [CC §5980]
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