Can You Lease to Purchase if an HOA Has Restrictions Against It?

A homeowners' association is a corporation responsible for marketing, selling and managing homes within a community. The board is generally made up of elected community members who collect membership dues and enforce the laws. HOA laws vary widely from state to state. Although there are no state laws prohibiting homeowners from leasing, some HOAs choose to ban rentals. A lease option is a rental agreement that gives the tenant the option to buy at the end of the lease. If the HOA doesn't allow leasing, a lease option is also out of the question.

Rules and Regulations

Each HOA sets its own rules and regulations. The covenants, conditions and restrictions are the documents that dictate how the HOA operates and what rules homeowners must follow. Failing to comply with the CCRs can result in fines and penalties. If the landlord leases a home and the CCRs have a restriction against it, the HOA may even evict the tenant.

Prohibiting Rentals

Homeowners must follow all requirements set by the HOA, even if they don't agree. Sure, maintaining the homes and yards, keeping noise to a minimum and even restricting certain pets helps keep the community orderly and safe. However, controlling who is allowed to live in a homeowner's property can seem a little unfair. When a person purchases a home governed by an HOA, she is agreeing to follow all the rules. It is not uncommon for HOAs to prohibit leasing. In fact, an MSN Real Estate report indicates that as of 2010, as many as 40 percent of HOAs ban leasing.

Interpreting

Sometimes the clause pertaining to renting or leasing the home is vague. For example, it could state "the dwelling or any part thereof shall be used for any purpose except as a private dwelling for one family, nor shall any business of any kind, including rentals, or noxious or offensive activity be carried on..." Since a lease with option to buy differs from renting out the home, the rental provision doesn't provide a clear answer. On the other hand, the HOA could consider a lease option the same as a rental.

Exceptions

In some cases, the HOA may allow the homeowner to lease the home, even though it isn't typically allowed. A hardship clause gives an owner the opportunity to ask the board for a waiver to allow him to lease the property. Determining a hardship is typically subjective, since most CCRs do not define what constitutes a hardship. For example, though, a hardship might be the owner suffering a job loss. If the homeowner falls behind on the mortgage and is in danger of foreclosure, the board may grant permission for a lease option.