HOA Rental Restrictions in California

Hi Peter,

According to the Davis-Stirling Common Interest Development Act Section 4741(a), unit owners cannot be prohibited by the governing documents from renting or leasing their separate interests to renters, lessees, or tenants.

In addition, Section 4740(b) states that the right to rent or lease property will not be deemed to have been terminated if the transfer of part or all of the property by the owner meets at least one of the following conditions:

• Pursuant to Section 62 or 480.3 of the Revenue and Taxation Code, the transfer is exempt, for purposes of reassessment by the county tax assessor.
• Pursuant to subdivision (b) of, solely with respect to probate transfers, or subdivision (e), (f), or (g) of, Section 1102.2, the transfer is exempt from the requirements to prepare and deliver a Real Estate Transfer Disclosure Statement, as set forth in Section 1102.6.

However, this does not mean the HOA cannot restrict other things related to rentals. For example, Section 4741(b) also states that associations cannot adopt or enforce provisions that restrict rentals within the community to less than 25% of the separate interests. They can, however, adopt a higher percentage for the restriction.

Moreover, subsection c says the governing documents may prohibit transient or short-term rentals for a period of 30 days or less. Subsection d also states that accessory or junior accessory dwelling units don’t count as separate interests for the purposes of the section.

For further guidance, kindly consult a lawyer.