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.
March 6, 2009 at 11:57 am
what association was this?
March 9, 2009 at 12:32 pm
Would it be correct to read 116.2117 (sub 4) along with your paragraph 3 comments above, to say that amending CCRs to restrict rental period, partial unit rental, and requiring HOA board approval of a lease would require a unanimous vote of home owners?
March 9, 2009 at 1:33 pm
roberta – the CIC escapes me, but I will find it on wiznet and get back to you
March 9, 2009 at 1:34 pm
larry – yes, I would read it like that, requiring all home owners, but be careful, as the law says even if it’s passed but not objected to it remains valid
March 10, 2009 at 2:59 pm
Thanks for covering this a bit at the SW meeting today.
May 21, 2010 at 7:41 am
[…] Rental Restrictions within an Association […]
May 22, 2010 at 7:47 am
MY client was told he has to wait for 3 other people to rent before he can put
his up. This will force him to lose the\
property as he cannot pay if it is vacant.
What do you recommend and where can we
look it up ?? the property is the highrise
Marie Antionette thanks
May 22, 2010 at 1:40 pm
The law says he can apply for hardship exemption to the board.
June 11, 2010 at 5:35 am
[…] Rental Restrictions within an Association […]
January 24, 2011 at 12:20 am
In response to Darren’s post on 5/22/10 on applying for hardship exemption to the board, is the board obligated to give the exemption upon proper documentation? There seems to be no guidance on NRS 116.335 on how the board should or should not grant the exemption.
January 24, 2011 at 11:43 am
No. It would be at the discretion of the Board, not mandated. This merely gives the Board the right to bend the rules without being in violation of their Bylaws. This alleviates the potential liability a Board Member would have had from the homeowners for not enforcing they Bylaws.
January 28, 2011 at 6:09 pm
If the CC&R says that amendment must require 67% of the total voting power of the association, how is this 67% calculated? The question is, what happen to the voter who didn’t cast their vote?…does it get counted? If the association has 570 unit and 216 vote yes and 121 vote no, clearly it is less than 67% (if one only count those who voted). However, what are the rules about those who didn’t cast their vote?
December 18, 2012 at 3:32 pm
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July 14, 2014 at 10:36 am
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April 13, 2016 at 7:39 pm
Can an HOA arbitrarily implement rent restrictions after 9 years…..my property has been a rental unit ever since I purchased it from the builder in 2006? Then, in Jan 2016, the HOA decided to implement the 20% rent restriction stated in the CC&R which was never used. Does the rental restriction apply to me? or, should it only apply to new rentals after Jan 2016? Doesn’t it make the law obsolete against me if it was not used for so many years as in “desuetude”? Thank you for your advise.
April 14, 2016 at 9:53 am
If the restriction was always present it is likely the CIC can commence implementation now. One can argue the other way, but you would have to take into consideration the entire document’s intent, etc. How they will implement, considering there may be in excess of 20% at the time of implementation, is another issue. Darren Welsh
April 14, 2016 at 10:29 am
There has been in excess of more than 20% rentals at the time of implementation. Furthermore, it has always been over 20% from 2006 to present. Shouldn’t my property be an exception and my rental privilege be grandfathered? My property was purchased as an investment in 2006 and I never lived in it. Thank you.