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2014-06-19 13:14:35
HOA Rules May Kill your Las Vegas Home Sale!

If you ever want to turn your home into a rental property, you better read the HOA rules & regulations before buying the home.  They may keep you from getting yourself out of a financial bind in the future.

Some HOA's (Home Owner Associations) have rules that only allow a certain percentage of homes in the subdivision to be rented out at any given time.  These rules are actually setup for the good reason of not allowing the subdivision to be over run with rental properties and tenants that do not care about the neighborhood. 

Here's a prime example of why this can be bad for any person living in the subdivision that wants or has to lease out their property.  Let's say you bought in this neighborhood fully expecting to live there for the rest of your life.  Unfortunately, you are upside down on your loan and one of your parents got sick in another state so you have to move to take care of them.  You decide you will just rent out the home hoping to break even on the payment until the home is no longer upside down or until you decide to move back to Las Vegas.  The rules under your current HOA have a 15% limit on home rentals in the subdivision and they are at the current limit.  You are out of luck.  You may be able to ask for an exception in the case of leaving to take care of a sick parent but in most cases you will not be able to rent the property.

Here's another example:  You bought in the neighborhood as an investor and rented out the home to a good tenant that hopes to be their for a long time.  The rental limit at the time was at 3%.  After renting the home for seven years, the current tenant moved out of the property.  Now you find out that the 15% lease limit has been exceeded and you can no longer lease out the property until the lease limit falls below 15% which may never happen.  You are at the mercy of the HOA representatives to allow you the same grace they allowed the homeowners that went over the 15% limit.  That may not happen! 

Please read the CC&R's (Rules & Regulations of the Community) before you purchase the home.  It may keep you from going through these situations.  I just had a client that had an investor back out of buying her home because of the 15% clause and when her tenant moves out in August will no longer be able to rent her home.  Not a good situation! 

There may be other rules in the CC&R's that keep you from buying in a subdivision.  I know these documents are long and boring but please take the time to read them.  It's for your benefit to know what's in them.

Thanks for reading my blog and have a great day!  As usual,  you can contact me at 702-809-6300 or by email at bradzsellsvegas@gmail.com.

 
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