BiggerPockets

Hi all,

This isn't an HOA issue as much as it is a city/county issue, but I just learned from my city inspector that the county my rental property is in (Prince George's County, MD) has a law stating that no more than five unrelated people can occupy a single family home. Of course, no one told me this when I bought it (through an real estate broker/investor), when I began renovating it (through a contractor/investor), nor when I applied for a rental license at the town's public records.

The long and short of it is that my wife and I have poured $75K into renovating the property, including the installation of egress windows and smoke alarms in every sleeping area, all with the plan to rent out 6 of the 8 bedrooms to university students because the University of Maryland is right down the street. Problem is, that's over the 5 limit.

Does anybody have any suggestions on how to fight this? The tenants are already in the house on 12-mo leases and half of them are coming from areas far away from here. I've followed all the rules, made safety and security the number one priority, and it's an excellent rental. It just violates this one code.

While waiting on replies, one suggestion I thought of was just tearing up the leases of two of the tenants and officially renting to only 4 others (my wife and I count as one person because we're married), treating the other two folks as guests in our home. Would that work?

Thanks now for any advice or suggestions you may have.

This is typically controlled by zoning. The planning and zoning commission (or whatever its called by the controlling city or county) will have maps showing the zoning codes for the city or county. They will have ordinances that describe the meanings and allowed uses. If you want to use the property in a way that conflicts with the current zoning, you have three choices. Grandfathering, rezoning or flying below the radar.

If the property have been used like you want to use it for some time, it may have been used like that before the zoning regulation was adopted. In that case, it may be grandfathered to allow its current use in spite of being inconsistent with current regulations. The controlling entity may have limitations on the grandfathering. For example, a transfer of ownership my eliminate the grandfathering. In any case, if you're doing something different with the property than its previous use, this won't apply.

Another option is to apply to have the property rezoned. Essentially, you're turning your property into a multi-unit. That's typically a change from lower density to higher density. There will be a process to rezone the property to the higher density. A planner at the P&Z commission can tell you the process, its requirements (often around parking), and the likelihood of it being approved. Often neighbors can have input into this process. If you're doing something inconsistent with the neighborhood, expect opposition.

The third is just to fly under the radar and hope nobody notices or reports you. If you suddenly have a lot of cars parked around the place, someone may call to complain. Especially if parking is limited.

Do realize that multi-units are held to a much stricter standard than single families. For example, in one city where I have property, they use the IRC 2006 code for singles and duplex, but the tougher IBC over that.

Its too late for this situation, but checking zoning is essential when buying property. Its especially important if you're changing the use of the property. In my farm areas, I see lots of illegal duplexes. Probably 25% of the houses I view have a kitchen and separate entrance to the basement. I shy away from such properties.

You might start with an anonymous call the planning and zoning commission to test the waters for the conversion. If I'm considering a property that I want to do something with, or if its already been done, I'll call the P&Z commission and have a very detailed conversation, including the address. But you may not want to do that since you already own it.

I don't think the leases will make any difference. Its the people who are living there that matter, not the details of how they're living there.

It's three unrelated and the better neighborhoods are where landlords and students want to expand this number. The HOA's are worse than ever and whole neighborhoods are being transformed by too many tenants and multiple SUV's spread out accross what used to be grass in the front yard. Everyone knows parties of young students are difficult to control, including your neighbors.

I hope some of your "guests" are actually related because that relationship makes a difference. Most issues are complaint based but zoning can make this an issue and force you to cut back.

There are some great responses to this very sticky issue.

In my market, Baltimore Maryland, there was an ordinance in place that restricted the number on non-related tenants to 3. This ordinance was contested in court on the grounds that it violated the Americans with Disabilities Act.

I am not sure of the specifics... but the bottom line... Baltimore lost.

So... what does this mean to us as investors... Baltimore stopped enforcing that requirement and was working on an ordinance change that would allow up to 8 non-related individuals.

This has opened many opportunities that weren't available including boarding houses (I hate them) and small (up to 8 client) assisted living facilities.

By way of advise... try to put at least a couple of tenants with disabilaties into this building.

Originally posted by David E

Hi all,

This isn't an HOA issue as much as it is a city/county issue, but I just learned from my city inspector that the county my rental property is in (Prince George's County, MD) has a law stating that no more than five unrelated people can occupy a single family home. Of course, no one told me this when I bought it (through an real estate broker/investor), when I began renovating it (through a contractor/investor), nor when I applied for a rental license at the town's public records.

As owner / landlord, you are responsible for knowing how your local municipality defines the meaning of "single family". In one town where I have a rental, it's a maximum of 3 unrelated persons; in the next closest town, it's a maximum of 2 unrelated persons. And that definition can be changed by the municipality passing an ordinance.

More discussion of ow a single family is defined is at this next link:
http://www.biggerpockets.com/forums/52/topics/10860-how-many-people-in-a-single-family-

And the neighbors will be the ones blowing the whistle on you, should you exceed the maximum allowed, AND they get upset over something (parking, noise, guests, parties, etc)