Thursday June 19, 2025
Rental restrictions in community associations limit or regulate how homes can be leased. In Washington DC, these restrictions often appear in an association’s governing documents, such as the declaration (also known as covenants, conditions, and restrictions, or CC&Rs), bylaws, and rules and regulations. Rental restrictions can vary widely, but often cover lease terms, the number of homes in the community that can be rented at any one time, or whether short-term rentals are permitted.
If your homeowners association (HOA) or condo association has recorded rental restrictions, homeowners are typically required to comply with those rules before leasing their property. This might involve submitting lease agreements to the board, following specific approval processes, or complying with waitlists or lease caps.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.
Pros and cons of rental properties in your association
If your association is already made up primarily of investors who intend to be landlords to Washington DC professionals and college students, you may not want to impose any kind of cap. On the other hand, if you have a lower percentage of renters and don’t want it to increase, a cap may make sense. Rental strategy decisions like these are often closely tied to the association’s overall financial management approach.Pro: 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.Pro: 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."A lot of board members have the perception that renters do not care for the property as their own, so they need to be limited. I think that’s more a perception than reality. Issues can be avoided if the community treats renters like they are part of the community, that it is theirs, then renters treat the property better. Also, if the association maintains the grounds and building properly, renters are likely to as well."
Christopher Dibble, a regional director for FirstService Residential
Con: High rental rates can affect financing
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.Learn more about financial planning in your community in our webinar here.
Con: 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 Washington DC."One of the cons of instituting a rental cap is the process and procedure involved in maintaining and monitoring who is renting, who is on the waiting list to rent their units and in what position, if they need to pay a deposit or not, and whether or not proper paperwork has been completed."
Christopher Dibble, a regional director for FirstService Residential
Legal considerations
When adopting or enforcing rental restrictions in Washington DC, community associations should keep these key legal points in mind:- Comply with DC statutes: Associations must follow applicable laws such as the DC Condominium Act when amending governing documents. This typically involves notice to owners, a membership vote, and recording the amendment.
- Determine licensing requirements: In the District of Columbia, most landlords must be licensed, even unit owners renting out a single space. That license and permit are good for one year and must be presented to the association board before a unit can be rented.
- Watch for Fair Housing concerns: Policies that disproportionately impact protected classes, whether directly or in effect, can create legal exposure under federal law and the DC Human Rights Act.
- Clarify tenant obligations: Tenants must follow community rules, but enforcement generally occurs through the property owner. Boards generally cannot evict tenants but may have options if the owner fails to address rule violations.
- Respect tenant protections: Lease agreements remain the primary contract between landlords and tenants. Associations cannot override these agreements and must avoid interfering with tenants’ legal rights under local landlord-tenant laws.
- Get legal input early: Association counsel can help draft balanced rental restrictions that comply with DC law and help protect the community from disputes over unenforceable rules.
How FirstService Residential can help
Managing rental activity is just one part of running a successful community. At FirstService Residential, we work closely with boards across Washington DC to deliver comprehensive property management services that lighten the load and help you focus on what matters most. From tracking lease compliance to maintaining common areas, preparing budgets, and supporting board meetings, we handle the day-to-day work that keeps your community running smoothly. Our local team brings decades of experience, deep knowledge of DC condo and HOA operations, and the tools to help your board lead with confidence.To learn how FirstService Residential can support your Washington DC community's vision, contact a member of our team.