Florida Condominium and Homeowners' Association Rental Restrictions

A South Florida property may appear to be a good rental investment until the owner discovers that the community has a rental waiting period, minimum lease term, limit on how often the property can be rented, or tenant approval process.

These restrictions can affect when a property begins producing rental income and whether an owner's intended leasing strategy will work.

They can also raise legal questions. Florida does not treat a condominium association and a homeowners' association (HOA) exactly the same way, and a rental restriction adopted after an owner purchased a property may not necessarily apply to every existing owner.

Before purchasing or renting out an association property, owners should determine exactly what the governing documents require.

CONDOMINIUM VS. HOMEOWNERS' ASSOCIATION: WHAT IS THE DIFFERENCE?

Although the terms are sometimes used interchangeably in conversation, a condominium and a community governed by an HOA have different ownership structures and are governed by different chapters of the Florida Statutes.

In a condominium, the owner owns an individual unit together with an undivided interest in the condominium's common elements. Florida condominium associations are generally governed by Chapter 718 of the Florida Statutes.

In an HOA community, an owner generally owns a separate parcel or home that is subject to recorded covenants, mandatory association membership, and association assessments. Florida homeowners' associations are generally governed by Chapter 720.

The distinction becomes important when determining whether a rental restriction applies.

DO NOT STOP AT “RENTALS ARE ALLOWED”

An owner should not simply ask whether a community allows rentals. A property can technically be rentable while still being subject to restrictions that significantly affect its value as a rental investment.

Before purchasing or marketing a property for rent, owners should check at least the following.

1. Is There a Waiting Period Before Renting?

Some communities have restrictions requiring an owner to own or occupy a property for a specified period before renting it. A one-year or two-year waiting period can be particularly important for an investor who expects rental income shortly after closing. If an association claims there is a waiting period, determine where the restriction appears, when it became effective, and whether it applies to that particular owner. The date an owner acquired the property can matter when a restriction was adopted after the purchase.

2. What Is the Minimum Lease Term?

An association may require leases to be for a minimum period, such as six months or one year. That may have little effect on an owner planning a conventional annual rental but can make the property unsuitable for seasonal or short term rentals. Owners should verify the actual governing language rather than relying on a listing description such as “annual rentals only.”

3. How Often Can the Property Be Rented?

The minimum lease term and the permitted number of rentals are separate issues. For example, a community may permit leases of six months or longer but separately restrict how many times the property can be rented during a calendar year. That distinction can become important when a tenant terminates early or an owner expects to rent the property more than once during the year.

4. Does the Association Require Tenant Approval?

Many condominium and homeowners' associations have an application or approval process for prospective tenants. Depending on the community, the process may involve an application, lease, identification, fees, deposits, screening requirements, vehicle information, or other documentation. Owners should determine the requirements and expected processing time before promising a tenant a particular possession date. A tenant who is otherwise ready to move in may still have to complete the association's process first.

5. Are There Other Rules That Affect the Tenancy?

Rental approval does not necessarily mean every other part of the tenancy is unrestricted. Owners should also check requirements involving:

• occupants;
  
• pets;
  
• parking and vehicle registration;
  
• gate or building access;
• common area privileges;
  
• moving procedures; and
  
• tenant registration.

These requirements should be identified before the lease and possession schedule are finalized.

CAN AN ASSOCIATION CHANGE THE RENTAL RULES AFTER AN OWNER BUYS?

Sometimes, but whether a later restriction applies to an existing owner requires a more careful analysis.

For condominiums, Section 718.110(13) of the Florida Statutes addresses amendments that prohibit rentals, change the duration of rental terms, or limit how many times an owner may rent during a specified period. The statute provides that those amendments apply only to owners who consent to the amendment and owners who acquire title after the amendment becomes effective.

Homeowners' associations are governed by a different provision. Section 720.306(1)(h) of the Florida Statutes generally limits the application of rental restrictions enacted after July 1, 2021, to owners who acquire title after the restriction becomes effective or who consent to it. However, the statute contains important exceptions, including certain restrictions involving rental terms of less than six months and renting a parcel more than three times in a calendar year.

Those statutes are not identical, and not every association rule concerning tenants falls within those particular provisions.

For that reason, owners should avoid assuming either that every newly adopted rental restriction automatically applies or that every restriction adopted after they purchased the property is automatically unenforceable.

REVIEW THE DOCUMENTS BEFORE BUYING OR FINDING A TENANT

For a property within an association, rental restrictions should be part of the investment and leasing analysis from the beginning.

Before purchasing or marketing the property, determine:

1. Whether the property is governed as a condominium or by an HOA;
   
2. What the current governing documents say about rentals;
   
3. Whether relevant restrictions were added by amendment;
   
4. Whether there is a rental waiting period;
   
5. The minimum lease term and permitted rental frequency;
   
6. Whether tenant approval is required and how long it takes; and
   
7. What other occupancy, parking, pet, and access requirements apply.

The projected monthly rent is important, but so is knowing when and under what conditions the property can actually be leased.

MANAGING AN ASSOCIATION PROPERTY IN SOUTH FLORIDA

Association requirements can add another layer to leasing a condominium, townhouse, or single-family home. Identifying those requirements before marketing the property can help avoid delayed possession, unexpected vacancy, and problems after a tenant has already been selected.

Icon Realty provides residential property management and real estate brokerage services throughout Broward County and select areas of Miami-Dade and Palm Beach counties. Our owner facing services include marketing, tenant screening, lease administration, and coordination of an association's application steps during the leasing process.

The association administers its own approval process. Questions about the interpretation or enforceability of governing documents should be directed to a qualified Florida attorney. Icon Realty's separate association management services are provided to an association under its own engagement and are distinct from management of an individual owner's rental property.

This article provides general information concerning Florida real estate and property management. Whether a particular association restriction applies or is enforceable depends on the governing documents, amendment history, ownership history, applicable law, and other circumstances.