HOA restrictions for rental in North Texas

Investor · Dallas TX · Member since 2024 · 10 posts · 8 votes

Hello

Can an HOA restrict rentals in North TX? For instance, if I bought a property in an HOA community and decided to use it as a rental can the HOA tell me no?

If they tell me no, and I do it anyways... what kind of consequences may happen in Texas?

Thanks

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Lucia Rushton

Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes

@Bob Smith yes is the short answer. And it depends is the long answer.

Many of the North Dallas HOAs have a variety of restrictions - percentage of total homes, the owner has to live in it 1 yr or 2 years.

Always check the CC&Rs.

As always just my opinion and not written by Ai

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Clint Jusino
Dallas · Member since 2020 · 154 posts · 95 votes
2y
Quote from @Bob S.:

Hello

Can an HOA restrict rentals in North TX? For instance, if I bought a property in an HOA community and decided to use it as a rental can the HOA tell me no?

If they tell me no, and I do it anyways... what kind of consequences may happen in Texas?

Thanks
I have a rental property in an HOA in South Dallas area and they can't say anything. As long as you follow the rules like lawn maintenance, paint the fence a certain color, keep the house a decent color you'll be fine. You are the owner and can turn it into a rental as you please. You own it. 😊
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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
2y
Quote from @Bob S.:

HOAs

They can prohibit rentals or impose such crazy regulations you won't be able to rent.

They can also change the regulations....I just saw an HOA first try to implement $300/year rental registration. Not sure if that worked or not, so then they tried to implement super strict rental regulations. This is after the HOA in existence 10-15 years. They can implement or may already have rules like no rental signs, HOA needs to approve any application (but they might only meet quarterly), no pets for tenants, owner must live in the house for 1-2 years before renting, no leases less than a year, limit on # of rentals, and more. The issues I am seeing, especially with newer HOAs make me think that you should almost never buy a rental in an HOA.

One HOA in north Texas tried a few years ago to prohibit Section 8 rentals. This was struck down, but they tried. Many HOAs have implemented STR restrictions if they didn't already have them.
What happens if you violate the rules. Can be severe penalties just like city STR restrictions, maybe $100s/day and legal expenses to force compliance. If you don't pay they have the power to foreclose and also to force payment thru a judgement if you ever sell the house.
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Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
2y
@Bob Smith yes is the short answer. And it depends is the long answer.
Many of the North Dallas HOAs have a variety of restrictions - percentage of total homes, the owner has to live in it 1 yr or 2 years.
Always check the CC&Rs.
As always just my opinion and not written by Ai
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Diego AlvaradoBusiness Member
Real Estate Agent · Flower Mound, TX · Member since 2016 · 298 posts · 139 votes
2y
Hi Bob,
Make sure to have an investor friendly realtor so that you won't have issues afterwards.
HOA are very tricky, as the boards change very often, they could be years that they don't do much and other years that they are suing residents if they are not maintaining the lawn.
CC&R are the key to review in this case, those are public so available for you, and those are required to be provided by the seller every time.
Don't go the route of do it anyways, that will have cause you consequences, I had a time that the HOA sued a property owner just for missing 6 months (the property owner was renting out the property and it didn't receive the invoice to pay the dues so she forgot). Then the issue was resolved,but then it went to attorney costs and a record on her name in the county that she didn't pay the HOA.
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Steven Chessler
Investor · Mountain View, CA · Member since 2015 · 6 posts · 1 vote
2y
Quote from @Bruce Lynn:

Quote from @Bob S.:

HOAs

They can prohibit rentals or impose such crazy regulations you won't be able to rent.

They can also change the regulations....I just saw an HOA first try to implement $300/year rental registration. Not sure if that worked or not, so then they tried to implement super strict rental regulations. This is after the HOA in existence 10-15 years. They can implement or may already have rules like no rental signs, HOA needs to approve any application (but they might only meet quarterly), no pets for tenants, owner must live in the house for 1-2 years before renting, no leases less than a year, limit on # of rentals, and more. The issues I am seeing, especially with newer HOAs make me think that you should almost never buy a rental in an HOA.

One HOA in north Texas tried a few years ago to prohibit Section 8 rentals. This was struck down, but they tried. Many HOAs have implemented STR restrictions if they didn't already have them.
What happens if you violate the rules. Can be severe penalties just like city STR restrictions, maybe $100s/day and legal expenses to force compliance. If you don't pay they have the power to foreclose and also to force payment thru a judgement if you ever sell the house.

@Bruce Lynn speaks the truth and may be referring to an HOA--Paloma Creek--that has jurisdication over one of our properties. The restriction on rentals that they put up for a vote would have been steep and abrupt: no grandfathering current owners, no gradual phase-in, nothing to mitigate what would have been a great deal of forced investment-home sales in what would have been fairly brief period of time. This immediate implementation would have been very bad for investors, bad for resident homeowners, bad for renters: would have been all-around painful. Unfortunately, the proposed restrictions were most likely legal and, I guess, would have survived litigation. Fortunately, the HOA lost the vote. But for me as an investor, lesson learned (!).
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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
2y
Paloma Creek was one I was thinking about, but there are plenty of others who had also tried some crazy restrictions. Nearby Savannah or Providence a couple of years ago tired to prohibit Sec 8, and the investors were able to successfully fight that. The Paloma Creek stuff just makes me mad. I don't own there, but have one investor client who's been in there about 10 years.
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