Can You Restrict Rentals in an HOA Community in Dallas? Best Practices

Can You Restrict Rentals in an HOA Community in Dallas? Best Practices

Buying a home in a Dallas HOA is a smart investment for a couple of reasons. HOA properties are typically known to hold their value and even appreciate at a faster rate, and the communal amenities make life more enjoyable.

As a savvy homebuyer, you probably need a property that can also generate a rental income when needed. However, the rules around rentals in an HOA community can easily become a barrier.

Some states have laws that empower HOA communities to ban rental property. Other states leave it up to HOAs to decide whether to allow rentals or not.

Here's what you need to know about rentals in Dallas HOAs.

Texas Law Regarding Rentals in an HOA Community

Every state has laws that regulate the actions of an HOA community. Texas is no different.

When it comes to rentals in HOAs across the Lone Star State, the law is largely silent on the matter as of 2023. This leaves HOAs with the power to decide whether to allow rentals or enforce restrictions.

Why Are Rentals a Touchy Issue?

You might be wondering why there should be a debate about rentals in an HOA community in the first place. As a property owner, you have the freedom to use the asset however you wish, including renting it out to a tenant. As long as you're not violating anyone's rights, there shouldn't be a problem, right?

Well, it's not that straightforward.

An HOA community is designed to be exclusive, and one of the primary goals is to maximize property values. Unfortunately, allowing rentals can have a negative impact on a community's exclusivity, and consequently, property value.

Having rentals in an HOA theoretically means the community is accessible to everyone. You don't have to be a homeowner to live there because you can simply rent a home in the community.

Rules Vary Among Dallas HOAs

Since Texas law allows HOA communities to chart their own path regarding rentals, you can expect rules to vary from HOA to HOA.

As such, if you're looking to invest in a rental property, or simply want the freedom to be able to rent out the property whenever you wish, it's your responsibility to research and find an HOA that permits rentals.

Every HOA has covenants, codes, and restrictions (CC&Rs). Your HOA's position on the matters should be clearly stated in these governing documents.

Though, keep in mind that CC&Rs aren't cast in stone. Amendments can be made from time to time. So, an HOA might have a friendly policy toward rentals, but there's no guarantee it will remain that way forever.

Ensure Proper Management of Rentals in an HOA Community

All things considered, it's prudent to allow rentals in an HOA community. Property owners need to be able to rent out their assets if they so wish. However, there needs to be guidelines on how to best go about it, such as requiring comprehensive screening of renters.

If a Dallas HOA needs help handling rentals in their community, PMI Alliance is only a call away. We offer professional association management services and can customize them to suit the needs of your community.

Contact us today and get ready to experience the PMI difference.