California Legislature Further Limits a HOA’s Right to Restrict Rentals

On January 1, 2012, Section 1360.2 (now Section 4740) was added to the California Civil Code to limit a HOA’s authority to adopt and enforce certain rental “prohibitions.” The legislative intent behind the law was the recognition that “the rights of Owners in [a HOA] to rent or lease their properties, as the rights existed at the time the Owners acquired them, should be protected by the State of California…” Nevertheless, by its own terms, Section 4740 applies to rental prohibitions, not necessarily less serious restrictions that are reasonably related to the Association’s interests in maintaining and preserving the community. Thus, many HOAs adopted restrictions regulating the rental of separate interests within the development (e.g., one-year minimum term limit, owner-occupancy requirements, individual room rental restrictions, etc.).     Read the article……………………………….