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Andres Felipe Alba Hernandez
  • Illinois
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Can convenants of the neigborhood restrict STR? on Single Family Home NO hoa

Andres Felipe Alba Hernandez
  • Illinois
Posted

Can a builder Covenant try to restrict renting a room from "house hacking" in a primary home?

The city has no restrictions but they claim the neighborhood has... 

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53
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Masyn Grant Barney
Agent
  • Real Estate Agent
  • Spanish Fork, UT
53
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75
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Masyn Grant Barney
Agent
  • Real Estate Agent
  • Spanish Fork, UT
Replied

Is there an HOA? I'd look through the official docs first. I did have a townhome that I sold to a client that had an HOA trying to restrict the use of the units to single family use only. No renting of any kind and explicitly mentioned even renting to others who live with you. So I would check those docs first. I imagine if they say nothing, you could start doing it and would have to be grandfathered in? Not sure though since HOAs seem to have way more power than they should IMO.

If the HOA doesn't say anything, then I would check occupancy limits with the city. Most college towns here in UT restrict to 3 unrelated people. So you can have a family + 2. Or 1 single person +2 friends, etc. Other cities in UT allow for up to 4 unrelated. This would likely be the only restriction the city could keep you to. 

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Ashish Acharya
Tax & Financial Services
Pro Member
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
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Ashish Acharya
Tax & Financial Services
Pro Member
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
Replied

@Andres Felipe Alba Hernandez Yes, neighborhood covenants can sometimes restrict certain activities, including short-term rentals (STRs) or renting out parts of a home, even in areas without a Homeowners Association (HOA). These covenants are private agreements put in place by the developer or builder. They can limit what property owners can do, including house hacking.

Even if the city has no restrictions, if legally binding and properly recorded, covenants can enforce rules that supersede local ordinances for those living within the neighborhood. If the covenant specifically prohibits renting out rooms or STRs, you may be restricted from doing so.

You should carefully review the covenants tied to your property to understand the specific restrictions.

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Rick Albert#3 House Hacking Contributor
  • Real Estate Agent
  • Los Angeles, CA
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Rick Albert#3 House Hacking Contributor
  • Real Estate Agent
  • Los Angeles, CA
Replied

There is a high probability it is enforceable. Generally you go with the strictest ruling.

With that said, it becomes a risk play. Some might ask, "who is going to enforce this?" What I've seen before is the only time rules are enforced are when neighbors get pissed (ie STR neighbors).

I would side with caution on this, especially if it is a newer built community where the rules are fresh with people.