Occupancy requirement

What are Occupancy Requirements?

Occupancy requirements are conditions put in place by a Homeowner Association (HOA) to regulate the proportion of units within a property, typically a condo or townhome community, that must be owner-occupied versus those that can be rented out. These requirements are usually defined in the HOA’s covenants, conditions, and restrictions (CC&Rs).

Why do Occupancy Requirements Exist?

The main objective of occupancy requirements is to maintain and enhance the property value and the quality of living conditions within the community. It is generally perceived that owner-occupied units are better maintained than rental properties, thereby contributing to the overall aesthetics and value of the community. It also helps to foster a sense of community among residents.

Impact of Occupancy Requirements

Occupancy requirements can have a significant impact on homeowners. They can limit the number of units that can be rented out, potentially affecting homeowners who bought properties intending to rent them. Furthermore, occupancy requirements can affect the eligibility of the property for certain types of mortgages, as some lenders may be wary of properties with a high percentage of rentals.

Compliance with Occupancy Requirements

It is crucial for homeowners to understand and comply with the occupancy requirements of their HOA. Non-compliance can result in penalties, including fines or legal action. Homeowners should thoroughly review the CC&Rs or consult with a real estate attorney to understand their obligations.