Phoenix Area Homeowners Ban Rentals

In the latest of a string of discussions and meeting on HOAs and Neighborhoods trying to ban rentals from their communities, a new court decision may pave the way. From the article published today, rental houses may soon find their way out of the neighborhood.

Phoenix attorney Beth Mulcahy said the case, decided by the Arizona Court of Appeals in December, upheld a Sun City condominium association's right to change its rules and restrict rentals. "It is an important case" and the first to reach the higher state courts, said Mulcahy, who represents more than 800 Arizona community associations, including some in Chandler. She said more of her clients are looking for ways to restrict rentals, given the influx of real estate investors in Arizona in recent years. The court decision came within days of a Chandler Congress of Neighborhoods at which about 80 residents said governments need to do more to prevent rental homes from becoming eyesores and landlords from skirting taxes and fees.

"The big issue is trying to get compliance with the CC&Rs (community covenants and restrictions)," Dunham said. "There's also a perception that renters are third-class citizens." The Leadership Centre educates residents who want to be active in homeowners associations. At a recent rental summit, speakers urged landlords to thoroughly screen tenants and advised homeowners to include renters in neighborhood activities. "When you have problems in a neighborhood, plan a party," Dunham said. "When you start putting faces on those people, all kinds of good things happen."

What homeowners can't control are market forces that might cause real estate investors to dump large numbers of houses on the market, reducing neighboring property values, Dunham said. Alan Langston, executive director of the Arizona Real Estate Investors Association based in Phoenix, said his organization considers most HOA limitations on rentals to be an infringement on property rights. "We don't like slumlords either," Langston said, and the association concentrates on educating members about cities' property maintenance laws and tax requirements.