Q&A: Can an HOA change residents' right to rent out their units?

Q&A: Can an HOA change residents' right to rent out their units?

Q. Can an association change a unit owner’s right to rent out his unit?

A. The New Jersey Condominium Act provides that a condominium’s master deed “shall set forth, or contain exhibits setting forth … restrictions or limitations upon the use, occupancy, transfer, leasing or other disposition of any unit… .”  N.J.S.A. 46:8B-9.(m),” says attorney Eric F. Frizzell, a partner with the Glen Rock-based law firm of Buckalew Frizzell & Crevina LLP. “Based on this statutory provision, any restriction on a unit owner’s right to rent his unit cannot be imposed merely by enacting a board resolution, but instead requires an amendment to the master deed or an “exhibit” to the master deed, namely, the bylaws.  However, if an association’s master deed already contains provisions regarding leasing, an amendment to the bylaws would likely not be sufficient, and a master deed amendment would be necessary.  

 “A question that commonly arises is whether an association can restrict the rights of an existing unit owner to lease his unit, where no such restrictions previously existed, i.e., must the rights of existing owners to lease their units be grandfathered?  In the unreported decision of the New Jersey Appellate Division in the case of Cape May Harbor Village and Yacht Club Association, Inc. v. Sbraga, Docket No. A-6122-09T1, decided July 14, 2011, the court ruled that the owner of a home in a homeowners association,  who was leasing her unit before the Declaration was amended by a vote of the homeowners to prohibit the leasing of homes to third parties, was not grandfathered.  The court found that even though the original Declaration contemplated the leasing of homes, “it also contained provisions authorizing amendments of its provisions” and therefore “any purchaser was on notice that the provisions in the Declaration were not immutable.”  A second key consideration on which the court upheld the amendment was that the restriction was reasonable based on all the particular facts and circumstances.

 “An association that wants to impose limitations on a unit owner’s right to rent his unit should do so by formally amending its governing documents, and for valid reasons that promote legitimate purposes of the association.” 

Related Articles

Information Gathering icon in vector. Logotype

Q&A: Census Consensus

Q&A: Census Consensus

Business people studying list of rules, reading guidance, making checklist. Vector illustration for company order, restrictions, law, regulations concept

Amending Documents

Bylaws, House Rules & More

Co-op/Condo/HOA  Instructions Included

Co-op/Condo/HOA Instructions Included

The Importance of Governing-Document Literacy

Red neon sign of "No Vacancy" at night

Short-Term Rental Registration Law Curbs Airbnb

Local Law 18 Protects Residents, Visitors Alike

Public law consulting and legal advice concept.Vector illustration.

Q&A: Ranking Rules

Q&A: Ranking Rules

hands passing a relay baton on rowing team background and color tone effect.

Continuity & Transfer of Power

Getting New Boards & Board Members Up to Speed



  • We just took possession of a unit in a condominium and are now the deeded owners. We are renting it out to the previous owner with a 5-year lease. Now they are trying to sell the entire building to a developer as a termination and although we don't agree to it, they may have the percentage for the revocation. However they do not have 100% of the owners agreement to sell the property which they need. If they force the sale, does the least transfer to the new owner? All of our attorneys have verified that it does but there are still trying to fight us. The least tenant also has a disability. The new owners plan on using it as a rental property anyway. Because of the low rent, they are trying to fight us but I'm sure they wouldn't if it was 10K a month! This renter has rights. Anybody with experience in this matter as termination is very new to most states.