Protect estate home values with a rental policy

To protect home values in residential estates and cluster home complexes, the homeowners' association (HOA) should have a formal policy covering the letting of homes in complex and the obligations of owners who become landlords.

Most tenants will of course be happy to comply with all the HOA rules and live in harmony with their neighbours. But there are always a few that won't, and as long as they're paying their rent, it can be difficult for the HOA management committee to persuade the landlord to take any action.

The non-resident landlord is often also less interested in the overall condition of the development than resident owners, and less willing to pay HOA levies that go towards the maintenance and repair of common facilities and equipment.

This is why lenders tend to take a very wary approach to granting home loans in developments where a large percentage of the homes are tenanted - a fact that makes it more difficult to sell properties there and can seriously undermine home values.

But a formal rental policy, written into the HOA constitution, can go a long way towards preventing a downward value spiral from developing. This policy should include a requirement that owners who let their properties include the HOA constitution and rules (including the rental policy) in their lease agreements.

It should also include a provision that any violation of the constitution or HOA rules will automatically constitute a breach of the lease agreement, and that the owner of the rented property will then be required to take immediate corrective action, including eviction of the tenant if appropriate.

In addition, the HOA should for security reasons insist that owners who turn landlord supply the management committee with their tenants' names, contact details and vehicle information, and obtain copies of their lease agreements including the HOA constitution and rules.