Avoid Lease Conflicts With HOA Rules

Would you, as a property manager, know all of the HOA rules or be aware of all changes made to them regarding the rental homes you manage? Probably not. The question is, what could happen if a tenant executes a lease that conflicts with the HOA rules? or if the HOA amended rules later that conflicted with the lease? Depending on the nature or materiality of the HOA rule, the tenant may assert grounds to terminate the lease, not to mention the home owner could be fined for violating the HOA rules.

Perhaps notable topics of interest are rules or changes in the HOA’s policies regarding pets, vehicles and amenities. If a tenant signed your lease in reliance of, for example, your promise that he could have a certain kind of pet; could work on his classic car in the driveway; could operate his “business” in the residence; or could have a children’s playground in the yard, and the HOA rule–or change to the rule–prevented those things, the tenant could cause the landlord all kinds of problems, including demanding the landlord to cure the lease violation or terminating the lease.

The solution here should come from the lease itself–without the need of the property manager’s knowledge or involvement with HOA rules.  For example, the following lease provision segment addresses this concern to help alleviate the conflict:

“…If there is a conflict between the terms of this lease and the rules, by-laws and regulations of the applicable homeowners and/or condominium association (hereinafter “rules”), whether existing now or in the future, the rules prevail, and the Tenant hereby waives any rights or claims of relief relative to such conflicts or any reliance the Tenant may have made on this lease’ terms or statements or representations made by a party to this lease. Tenant is responsible to obtain a copy of and read the association’s by-laws and rules and regulations prior to executing this lease…”

The property manager should be prepared to answer questions regarding the rules of the association if the tenant asks, but the best answer to such questions is that the property manager does not know all of the rules (any time you make a representation as being true, that is when the tenant can claim “detrimental reliance”) and that the lease requires that the tenant learn the rules himself by contacting the association or conducting a public records search.