How to Get Around HOA Rental Restrictions

How to Get Around HOA Rental Restrictions

I have a condo and wanted to rent it out. The situation occurred because I had to move. But, honestly, I figured one day I would want to come back and live in the condo. So, I decided to rent it out. But, I didn’t know how to get around HOA rental restrictions.

Then, I researched the HOA rules and restrictions. What I found was that you could rent it out under 2 conditions namely as an investor or a hardship.

HOA Investor Rentals

To easily make the property a rental, I would have to get HOA approval. In doing so, I would submit my application, get it approved, and then be added to a list of property owners looking to rent their condos as well. The catch was there were only a certain amount of condos that could be rented due to insurance reasons. So, what happened was those that were able to get on the investor rental list, never left. So, I was added to a long list of people. The problem was the list was long. They were estimating a couple of years before I could rent the property. That’s a bummer because I want to rent it now.

HOA Hardship Rentals/Leases

To become eligible to rent under the Hardship policy, I had to meet certain conditions. These conditions of course were limited. And, the hardship lease would only allow me to rent for a year, then I would have to sell or move back.

How to Get Around HOA Rental Restrictions – The Answer

So, the answer. Set up a Revocable Trust. Here’s how it works.

  1. Set up a revocable Trust
  2. Change the title on the property to be owned by an entity, like an LLC.
  3. Have the revocable trust own the LLC.
  4. Next, on the revocable trust, have the renter become an owner with no rights. This will show that the renter is an “owner” of the property.
  5. Then submit the paperwork showing this to the HOA.
  6. Have the HOA approve.

So, this technique does work. The only catch is if the legal representation for the HOA fights it. But, not all legal representatives will. It’s worth a chance.

Personally, I had an attorney set this up for me as it was more valuable to me. It cost about $1,500. If you feel comfortable in doing it yourself, check here for Revocable Trusts. I didn’t have the background and wasn’t sure how to do it.

Another benefit of having an attorney do the revocable trust, was the side benefits. I was also able to:

  • Put my property into the trust
  • Assign my children as beneficiaries
  • Set up distributions – In case I pass, the estate will be passed in graduated distributions with the option to execute. For example, get a percent at age 20, then 25, 30, 35, etc. And, in the case of divorce, keep the distribution within the trust so soon-to-be ex couldn’t touch it.
  • Protect everything – Everything I own is now in separate LLC’s. If one property has an issue, all other properties, businesses, etc. are protected legally.

Other ways on how to get around HOA Rental Restrictions

Owner Finance the Property

List your property as an owner finance. This may or may not work. I would suggest reviewing the covenants, then asking the HOA prior to doing this. You don’t want it to backfire on you. Keep in mind that not everyone can afford to purchase properties. And, from what I understand, a lot of these owner financing may have a clause where it’s a rent-to-own. Just present it differently to the board. And, if you do a rent-to-own, chances are the people will back out. Then, just repeat this process.

Something else to consider but not recommended

Calculate Your Loss

Calculate the penalties of renting versus the actual rent. You may still come out on top!

2 thoughts on “How to Get Around HOA Rental Restrictions”

    • Krish, good morning. I used a local law firm and worked with Lauren Marlow as she focused on trusts. You can find her profile on the site. It was important working with her because I was able to set up the trust for my family, and use it for the HOA. Keep in mind, whether you are successful or not depends on the law firm representing the HOA. I didn’t have any pushback with mine.

      Out of curiosity, would it be worth me publishing the documents and steps? Of course, I’d filter out a lot.


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