Pennsylvania rental restrictions: What your community should know

Thursday June 19, 2025
This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

What are community association rental restrictions in PA?

PA HOA rental restrictionsIn Pennsylvania, rental restrictions are rules that govern how and when owners in a community association can lease their homes. Common Pennsylvania rental restrictions include minimum lease durations, caps on the percentage of units in the community that can be rented out, and requiring board review of lease agreements. Some associations also restrict subleasing, regulate renewals, or require owners to live in the home for a set period before renting.

New restrictions usually require a formal amendment process and may need a membership vote, depending on the bylaws. Board members should consult legal counsel, along with their community association management team, to confirm what’s allowed under their governing documents and Pennsylvania law before moving forward.
 

Understanding the potential risks and rewards of rental properties in your community

Every community is different, but rental policies can have a real impact on your association’s financial management, operations, and day-to-day experience. Weighing the pros and cons can help your board shape a policy that reflects your goals and supports long-term stability.
 

Reward: Rental flexibility can support owner needs

Allowing rentals gives owners options when life plans change. Whether they’re traveling, on a temporary work assignment, or caring for a loved one, rental flexibility can help owners stay connected to the community. This can be especially valuable in high-cost markets or during periods of transition. With the right policies in place, boards can offer that flexibility while still protecting the long-term stability of the association.
 

Reward: Positive rental experiences can lead to ownership

Many renters are simply waiting for the right time to buy, and a positive experience in your community can help guide them toward that decision. Effective community communication, helpful orientation, and positive everyday interactions with staff can turn short-term renters into long-term residents. When renters feel welcome and informed, they’re more likely to see the value of ownership. For boards, that’s an opportunity to support community stability and build a pipeline of future homeowners.
 

Risk: High rental rates can affect financing and resale

Lenders pay attention to how many homes in the community are rented. A high percentage of rentals can be seen as a risk factor, especially if there are signs of delinquency or multiple units owned by a single investor. This can affect the association’s ability to secure loans for capital projects or improvements. Keeping a balanced owner-to-renter ratio can help protect financing options and maintain the community’s financial strength.

Rental ratios also impact buyers. The Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac often require that at least 50% of homes in a community be owner-occupied for a buyer to qualify for a mortgage. That threshold has shifted in the past based on market conditions, but remains an important factor in resale. If your community relies on buyers using these programs, a high rental rate could make units harder to sell.
 

Risk: Rentals can increase administrative workload

Renters may create extra work for the board and management team in terms of paperwork, approvals, background checks, and getting owners to submit updated leases every year. That workload may be a factor to consider when deciding on rental restrictions in community associations in Pennsylvania.
 

Understanding rental laws and compliance

Boards in Pennsylvania may have the authority to regulate certain leasing activity, but that authority exists within a broader legal framework. Understanding the laws that apply to landlords, tenants, and associations is essential when creating or enforcing Pennsylvania rental restrictions:
  • Pennsylvania Landlord and Tenant Act of 1951: This law outlines key responsibilities for landlords and tenants, including rules around evictions, maintenance, notice periods, and security deposits.
     
  • Pennsylvania Uniform Planned Community Act (UPCA) and Uniform Condominium Act (UCA): These acts outline how community associations operate in Pennsylvania and may give boards the authority to adopt rental restrictions when properly added to governing documents. Policies should be clearly written, consistently enforced, and adopted using the correct process outlined in your declaration or bylaws.
     
  • Municipal rental ordinances: Some cities and townships require rental properties to be registered, licensed, or inspected. These rules can affect leasing timelines and compliance. Boards should understand any local requirements that could impact their communities.
     
  • Pennsylvania Human Relations Act and Federal Fair Housing Act: Both federal and state law prohibit housing discrimination and require that rental rules be applied fairly and consistently. Boards and landlords must be prepared to respond appropriately to requests for reasonable accommodations related to disability or other protected characteristics.
     
  • Fair Credit Reporting Act (FCRA): If your board or management team conducts tenant screenings, such as background or credit checks, the FCRA may require proper disclosures and written consent. Following these steps can help protect the association and keep your processes compliant.
When adopting or amending Pennsylvania rental restrictions, boards should always consult qualified legal counsel.
 

How to manage rental properties in Pennsylvania

Effectively managing rentals within a community association requires a balance between homeowner flexibility and community stability. In Pennsylvania, boards have the authority to regulate leasing, but it's essential to align policies with state laws and local ordinances:
  • Establish clear rental policies in your governing documents: If your board wants to limit lease terms, set rental caps, or require lease approvals, those policies should be written into the governing documents. Updates or changes typically require a formal amendment and member vote, following the process outlined in your documents.
     
  • Stay current with legal requirements: Rental rules must comply with laws at the local, state, and federal level, including fair housing protections, municipal ordinances, and Pennsylvania’s landlord-tenant statutes. Reviewing policies periodically can help keep your board aligned with what’s legally allowed.
     
  • Offer a tenant orientation process: A brief orientation or welcome process for renters can help them understand community rules and expectations early on. It also gives the board and management team a way to set clear standards and reduce confusion later.
     
  • Track rental activity consistently: Keeping an updated record of which homes are rented, lease durations, and any policy-related issues can give boards better oversight. It may also make it easier to address problems early and spot patterns that may need attention.
Learn more in our article: Pennsylvania property management: Benefits, costs, and more.
 

How FirstService Residential can help

At FirstService Residential, we help boards manage their associations with the right tools, local expertise, and day-to-day support. If your community is evaluating Pennsylvania rental restrictions, we can help streamline the process and support consistent enforcement. Contact us today to learn how we can make a difference for your community association.
 
Thursday June 19, 2025