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HOA rental restrictions — rules limiting the percentage of units that can be rented, the minimum rental term, or the types of tenants allowed — have been increasingly scrutinized by California courts and the legislature as housing availability concerns have grown. Understanding what rental restrictions are currently enforceable, and what California law limits, is essential for both investor-owners and associations trying to manage their communities.
Rental Caps Under Davis-Stirling
Associations can limit the percentage of units that may be rented at any time — commonly 25% or 35% caps are found in California CC&Rs. These rental caps are generally enforceable against owners who purchase after the cap is established. California Civil Code Section 4741 added limitations: associations cannot prohibit rental of a separate interest outright; cannot impose a rental cap below 25% of the total units in the development; and cannot apply a rental cap to owners who purchased before the cap was established. An association trying to apply a new rental cap to existing owners who were renting before the cap was adopted has a legal problem.
Minimum Lease Term Restrictions
Associations can require minimum lease terms — typically 30 days to 12 months — as CC&R provisions or board rules. These are generally enforceable. The short-term rental (Airbnb/VRBO) restrictions discussed in an earlier post represent the most aggressive version of minimum lease term enforcement, and are generally upheld when properly adopted. For owners who want to rent at all, the key question is whether the minimum lease term provision in your CC&Rs was properly adopted and whether it applies to your situation.
Fair Housing Limitations on Tenant Screening Rules
HOA rules that affect tenant selection — requiring board approval of tenants, subjecting prospective tenants to criminal background checks, or imposing additional requirements on tenants — must comply with fair housing law. Rules that screen out tenants based on protected characteristics (national origin, source of income, familial status) violate California’s FEHA. Association-level tenant screening that produces discriminatory patterns — even without discriminatory intent — creates fair housing liability for both the association and potentially the individual board members who adopted and enforced the policy.
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