The Rental And The HOA…An Ever Changing Story


Rentals and HOAs

So much of the Santa Clarita Valley is subject to the rules and regulations of a Home Owners Association (HOA) which in more legal parlance is a Common Interest Development (CID).  Sometimes there are even sub-associations within the master association.

Where Do Association’s Get Their Power?

The short answer is the Davis-Stirling Act.  Now here is the long answer.  CIDs were previously regulated by a set of laws spanning the Corporation’s Code all the way to the Civil Code.  Confusing to say the least.

In 1985 a piece of legislation was drafted by Assemblyman Lawrence Stirling along with his fellow Assemblyman Gray Davis.  Yes, that Gray Davis – the future recalled Governor of California.

The act became mown as the Davis-Stirling Common Interest Development Act and was signed into law by Governor George Deukmejian on September 18, 1985.  The effective date of the law was January 1, 1986.

In 2012 the law was updated by the legislature and subsequently signed into law by Governor Jerry Brown.  The purpose of the rewrite was to update, renumber, reorganize, and simplify the Act.  The revised act takes effect January 1, 2014.

The original Act took up a whole 25-pages.  The revised Act encompasses over 100-pages.  Ah, now that’s progress.  Also of note is that the Davis-Stirling Act applies to all common interest developments in California, including those in existence prior to the Act.

How the Act Affects Rentals

There are many communities in the Santa Clarita Valley that limit either the number or scope of rentals within their community.  In part this is done to maintain a balance of owners to tenants.

One of the important changes coming up on January 1st is that rental prohibitions adopted after January 1, 2012 do not apply to existing owners in a development; they only apply to those who acquire property after the prohibition has been adopted.

This is important to note especially if you serve on the board of directors for you HOA.  Perhaps what you intend to do – limit the number of renters in your community – may not actually be accomplished.

And from a direct landlord perspective you might want to check with your HOA’s governing documents to see if a rental restriction is in place.  This holds true for purchasing an investment property.  Does the HOA have any restrictions in place?  Many, many, real estate professionals do not know to check for this fact.  And you would not want to buy that property and find out you cannot rent it out.