[CA] Can an HOA enforce a rental cap without prior notice, and is selective enforcement considered discrimination?

CA Real Estate

Barrister

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AB 3182 basically prohibits HOAs from making new rules about restricting rentals apply to current owners who owned prior to the new HOA rule. So it essentially grandfathers in old owners. (CA Civ Code § 4741)

So if you owned the place in 2016, then if they passed the new restriction after Jan 1, 2021, it wouldn't apply to you. Any rules that restrict you would have to have been in place prior to that time. The law only became applicable after Jan 1, 2021—it isn't retroactive. So if the rule was before that, then it is legal. (CA Civ Code § 5975)

Whether they were strict about enforcing it or not is up to the HOA, but if there were other violations and they ignored it, you could have grounds to sue for “disparate treatment,” which has nothing to do with race but is discrimination based on not applying the rules evenly. (42 U.S.C. § 3604)

But it sounds like you are saying they increased the units allowed to be rented after AB passed—that would be in your favor if you are trying to rent.

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I’m currently in a dispute with my HOA in regards to renting out my condo. I had to move out abruptly so did not give the HOA notice that I was moving, but had asked the HOA president if I needed to submit anything to the HOA and he said “he didn’t think so” and he also told me “they have never enforced a rental limit before.” Which I have issue with being the only black occupant in the building and all of a sudden now they want to enforce the restriction.

We currently have a 25% rental cap of 5 units that was amended post the passage of AB 3182, from 4 units prior. I purchased my unit in 2016 and from my research I’ve been getting unclear responses. Some saying that the HOA cannot restrict my ability to rent out my place to others saying I have to abide by the new cap.

The board had a meeting recently and decided to fine me $100 for not notifying the board and exceeding the rental limit. Can I please get some insight on your opinion on this? Do they have standing to restrict me from renting? And do I possibly have a case to sue them for discrimination.

Lexi, Chatbot

I understand how frustrating it must be to deal with your HOA regarding renting out your condo. Can you please share when you first learned about the rental cap and any communications you've had with the HOA about your situation?

I’ve known that the cap was there but I thought it was increased prior, but apparently that increase was never implemented.

Lexi, Chatbot

Have you received any official documentation or notices from the HOA regarding the fines or the rental restrictions?

Yes.

Lexi, Chatbot

Is there anything else the real estate lawyer should know before I connect you? Rest assured they'll be able to help with your HOA dispute.

Yes.

Barrister

Hello and welcome to the site! My name is Barrister and I am a licensed attorney and I am here to help with your situation. I know your question is important, but there may be a short delay in my responses as I type out an answer or reply as I am typically working with several customers at once on the website.

I have read your post and I am sorry to hear you are having to deal with this situation as I realize it can be frustrating and confusing. Do you have some type of evidence that indicates that they are enforcing the rules of the HOA because of your race? Are they not enforcing the rules against owners of other races?

Barrister

Unfortunately, this is going to boil down to whether your HOA Bylaws limit the number of rentals that are allowed in the development. If it does, then if that limit has been reached, legally, they can prevent you from renting unless there is some type of provision in the bylaws that allows you to apply for something like a hardship exemption.

But you would only have potential legal grounds to sue for unlawful discrimination if they were allowing people of other races to rent their properties in violation of the bylaws and refusing to allow any black occupants to rent theirs.

The bylaws do in fact have a limitation. What is your specialty in law by the way? And how familiar are you with AB 3182 that was passed in California? That is my real question in all of this—how and what did that law do to give me standing in this matter?

My presumption that there is some sort of prejudice is that the HOA president told me that they’ve never enforced a rental limit before and now all of a sudden they’re deciding to enforce it. So there was a stricter limit in place before AB passed, then that increased the limit by 1 more unit.

Barrister

I'm a real estate law and landlord-tenant law for 25+ years.

Barrister

But it sounds like you are saying they increased the units allowed to be rented after AB passed—that would be in your favor if you are trying to rent.

But we are already at the 5 unit cap, I’m the 6th.

Barrister

Then you are kind of stuck. So if it was 4 before AB, 5 after AB, and now you are the 6th, then you would be violating the rules.

But again, if they ignored the rules for landlords before, that could be disparate treatment.

So the grandfathering only worked if it was higher and then reduced?

Barrister

Correct— or if there were no restrictions and then the HOA voted to impose them.

So as far as the fine imposed, I saw the new law capped the possible fine at $100. Does it state if that’s yearly/monthly?

Barrister

To be honest, I am not sure as I haven't read it through thoroughly.

After a quick search: this is a flat, per-violation penalty—there is no ongoing daily or monthly accrual built into the law. The $1,000 maximum has remained unchanged since enactment.

AB 3182 (Civil Code § 4741) does not impose per-day or per-month fines on HOAs.

If an HOA willfully violates the law, they may owe actual damages plus up to $1,000 to the owner.

But any fines against homeowners are determined by HOA bylaws, not state law.

I see.

So there’s not a lot of transparency with the units that have been rented. I believe one is the children of the mother that owns the unit. Do I have any footing to ask for which units are rented?

Barrister

I think as an owner and HOA member, you have the right to inquire which units are rented, but not for more info than that.

Thanks. Do you happen to know what percentage of units being rented in an HOA affects financing and refinancing?

Barrister

Sorry, no idea about that.

Barrister

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