Can an association limit the amount of rentals in an association? Yes and No.  The Covenants, Conditions and Restrictions (CC&Rs) also know as a ‘declaration’ within an association can limit many things.  Limiting the amount of rentals is certainly an option.  Any subject matter that is not protected can be limited.  For example, it is not allowed to restrict family status, nor race, creed, color, etc. 

 

The question, however, is if the restriction was in place at the time of the recording of the CC&Rs.  A recent example that I was asked about was a ‘modification’ to the CC&Rs to limit rental use which was imposed by a Board of Directors. This is not allowed.  A modification of a restriction which limits the “use” of a property must be passed by the “unanimous consent of the owners affected.”  NRS 116.2117.

 

If your client is dealing with an association that limits the amount of renters, have your client do some research.  The client should contact the association and ask, “Which is the restriction that limits rental use? When was it created? If it was an amendment did it comply with NRS 116.2117 by gaining a unanimous consent of those properties affected? 

 

Note:  Even if the CC&Rs declare that a percentage of affected owners less than 100% is required to pass such an amendment, there is an argument that the statute trumps and 100% is still required.

Advertisement