Rental Caps and Your Homeowners' Association ( HOA )

January 16, 2018



Many properties in Colorado are used as a second home or a vacation home. These owners often rent these properties for part or all of each year to help cover expenses and provide additional income.  


When owners or investors buy a property that is under the jurisdiction of a Homeowner’s Association (HOA), they were given a set of Covenants, Conditions & Restrictions (CC&Rs) that outline all the rules and ‘laws’ of the community. The buyers agreed to follow the rules and restrictions of the HOA. 


The introduction of Airbnb and other vacation rental websites opened a door easily allowing property owners to rent out their homes known as short-term-rentals (STRs). This was great for the owner who could subsidize his mortgage payments by renting. Investors saw the opportunity and began buying properties to rent out.


Recently, HOA communities are and have been putting a halt to the rentals in the form of ‘rental caps’.  A rental cap is a limit on the number of renters allowed in the community. Some HOAs only allow a certain percentage, or number of units that can be rented. If the rental cap has been met in the community, you’ll have to add your name to the HOA waiting list before you rent your property.  Many HOA communities have put a complete ban to rental and some have restrictions stating the property has to be owner-occupied. 


Presently, around 40% of HOA communities have restrictions on renting.   Many of the earlier HOAs had no rental caps or restrictions when the owners bought them. Owners may now find the HOA has since enacted or in the process of enacting new rules and regulations regarding the rentals. Yes, the HOA can stop you from renting your home, even if there were no rules governing or stopping you from renting when you bought the property.   


HOAs have been and are now stopping rentals or putting strict rental caps on the basis that part-time owners and investors are not as responsible as full-time owners and not as involved in the community.  There are also concerns for security, exactly who the renters are and were they ‘vetted’.  Also in consideration are the regulations regarding rental caps and staying within the guidelines of lender financing and insurance issues.  


Placing rental caps on the community is evenly divided between having and not having them. The property is less marketable with the caps, cutting out investors and part-time owners. The HOA board may have a difficult time determining who is actually renting and what their lease contains. Investigating will certainly lead to legal issues. There are also some owner-occupied properties that rent out a basement, or room because they need the extra income to pay their mortgages and HOA dues.


If you find yourself embroiled in this or any other HOA issue, Gantenbein Law Firm's Denver, Colorado HOA defense attorneys are knowledgeable, experienced and qualified to help homeowners and investors who may be caught in HOA conflicts or disputes in Colorado.


Along with any HOA issues you may be experiencing, Gantenbein Law Firm's Denver real estate attorneys can also assist with other real estate issues, including boundary disputes, HOA foreclosures, Colorado foreclosure defense issues, evictions, and more. Gantenbein Law Firm also practices Business Law, Tax Law, Elder Law, Wills, Trusts and Estate Planning, Probate Law and Credit Disputes


To schedule a consultation of your case, visit, schedule online, or call 303-618-2122.



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