Rental caps and investment buyers
If you are buying to rent, the CC&Rs can stop you even when the city would issue a rental license. The reverse is also true: a board cannot always invent a new rental ban by passing a house rule. You have to read both layers — recorded covenants and the state statute that limits those covenants — in the state where the lot sits.
Florida's lease-amendment rules and North Carolina's declaration-amendment vote are not national law. They are labeled below so you do not export them to Arizona or New Jersey.
What usually lives in the CC&Rs, not in a board policy
Rental caps, minimum lease terms, owner-occupancy seasoning (no renting in the first year), waiting lists, and tenant-registration requirements are typically declaration issues. A board rule that contradicts the recorded CC&Rs is the first thing a court looks at. North Carolina's Planned Community Act is a clean illustration of that idea: the association's power to restrict use comes from the recorded declaration, and changing the declaration is an owner vote, not a board memo.
Under North Carolina General Statutes section 47F-2-117, except for specified declarant or lot-owner amendments, the declaration may be amended only by affirmative vote or written agreement signed by lot owners of lots to which at least 67 percent of the votes in the association are allocated, or any larger majority the declaration specifies. The declaration may specify a smaller number only if all lots are restricted exclusively to nonresidential use. Every amendment must be recorded in every county where any portion of the planned community is located, and it is effective only upon recordation. That is how a North Carolina planned community adds a rental cap that was not already in the declaration. It is not a board resolution, and 67 percent is a North Carolina floor for residential planned communities — not a U.S. floor.
North Carolina's statute does not, in the text fetched here, create a statewide maximum percentage of rented homes. If a cap exists (15 percent, 25 percent, waiting list), it comes from that community's declaration or a recorded amendment, often written to satisfy project-level lending screens. Confirm the recorded language. Do not assume a "typical 25 percent cap" applies next door.
California: a statutory floor, plus grandfathering
California went the other direction. Civil Code section 4741 says an owner shall not be subject to a governing-document provision that prohibits, has the effect of prohibiting, or unreasonably restricts rental of separate interests, ADUs, or JADUs. A common interest development shall not adopt or enforce a provision that restricts rentals to less than 25 percent of the separate interests; the association may authorize a higher percentage. Section 4741 does not prohibit a provision banning transient or short-term rental of a separate interest for 30 days or less. ADUs and JADUs are not separate interests for this count, and a separate interest is not counted as rented if the owner occupies the separate interest or its ADU/JADU.
California associations were required to comply on and after January 1, 2021, even before restating documents, and boards had to amend noncompliant restrictive covenants by July 1, 2022, with general notice. A willful violation can mean actual damages plus a civil penalty up to $1,000. Section 4741(h) preserves section 4740: it does not change the right of an owner who took title before section 4741's effective date to rent or lease.
Section 4740 is the older grandfathering rule. An owner is not subject to a governing-document provision that prohibits rental unless that provision was effective before the owner acquired title. Before renting under that section, the owner must give the association verification of the title date and the prospective tenant's name and contact information. Nothing in section 4740 rewrites how the community adopts amendments; it only limits which owners a later ban can reach.
Read those two California sections together. A post-2021 CC&R that tries to cap rentals at 10 percent is the kind of provision section 4741 targets. A 30-day short-term ban can still be written. Owners who bought under an older, more permissive regime may still have 4740 rights. This is California law. It is not Florida law.
Florida: two statutes, two different "only new owners" rules
Florida condominiums (chapter 718). Section 718.110(13) says an amendment prohibiting unit owners from renting, altering the duration of the rental term, or limiting how many times owners may rent during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title after the amendment's effective date. There is no extra "short-term / three-times-a-year" carve-out in that subsection.
Florida homeowners' associations (chapter 720). Section 720.306(1)(h) is similar but not identical. A governing document or amendment enacted after July 1, 2021, that prohibits or regulates rental agreements applies only to a parcel owner who acquires title after the effective date, or who consents, individually or through a representative — except that an association may amend to prohibit or regulate rental agreements for a term of less than 6 months, and may prohibit rental more than three times in a calendar year, and those amendments apply to all parcel owners. A change of ownership does not occur on a conveyance to an affiliated entity, when beneficial ownership does not change, or when an heir becomes the owner. A change of ownership does occur when every person that owned an interest in a business-entity owner conveys to an unaffiliated entity.
If you are buying a Florida HOA parcel as an investment, a new short-term or "no more than three rentals a year" amendment can reach you even if you never voted for it. A new total ban on 12-month leases generally cannot reach owners who already held title and did not consent. If you are buying a Florida condominium, section 718.110(13) is the tighter owner-protection and does not contain that 6-month / three-times exception. Confirm which chapter governs the community (720 vs 718) before you underwrite the deal.
Florida's 720.401 disclosure summary also flags that recorded restrictive covenants will govern use. It will not reprint the rental article. You still have to read the declaration.
How this collides with FHA/VA and with your business plan
Project-level occupancy screens (see the FHA/VA guide) are about actual owner-occupancy, not about whether the CC&Rs allow rentals. A building can permit leases and still fail FHA occupancy on HUD-9992. A rental cap in the CC&Rs can help a board defend occupancy mix and still leave you stuck on a waiting list.
Before you buy to rent:
- Read the recorded rental article, not a manager's email summary.
- Check whether your state grandfathered existing owners out of later bans (California 4740/4741; Florida 718.110(13) and 720.306(1)(h) — labeled, not portable).
- Check short-term-rental overlays: city STR licensing, plus any 30-day ban (California 4741(c)) or Florida HOA sub-six-month rule.
- Check transfer approval, tenant registration, and minimum lease term.
- If you need FHA or VA financing, occupancy mix can kill the loan even when leasing is allowed.
If the declaration is silent, do not assume you may rent. Some states still treat unrecorded board policies as unenforceable against a use that the declaration allows; others give associations broader rulemaking. That is a local-law question. Get the recorded documents, then ask a lawyer licensed in that state whether a board rule can add a cap the declaration never contained.
Do not copy a Florida or North Carolina result into another state's offering memorandum. The whole point of this page is that those examples stay labeled.
This is general information from an AI helper, not legal advice. Confirm it against your documents and your state's law. If a deadline or hearing is coming up, talk to a licensed lawyer.