Owning a condo or a home inside a homeowners association does not automatically mean you can rent it out however you like. HOA rental restrictions are common, and they sit on top of whatever state and local rental law already applies to the property. In resort communities like Whitefish, where condos and planned developments make up a large share of the housing stock, this is one of the first things an investor should check before buying or listing a unit.
What Counts as an HOA Rental Restriction
HOA rental restrictions come in a handful of common forms:
- Rental caps, limiting the number or percentage of homes in the community that can be rented at once
- Minimum lease terms, often 6 or 12 months, aimed at discouraging high turnover
- Waiting periods, requiring an owner to live in the unit for a set time before leasing it out
- Short-term rental bans, prohibiting stays under 30 days
- Lease review or tenant approval requirements before a new renter moves in
These rules live in the association’s governing documents, usually the declaration or CC&Rs, and in the bylaws. They apply to the owner, not the tenant, so enforcement and any fines land on whoever holds title.
Can an HOA Actually Restrict Rentals
Generally, yes. Courts in most states uphold rental restrictions that are properly adopted, clearly documented, and tied to a legitimate purpose such as protecting property values, keeping the community’s owner-occupancy ratio high enough to qualify for standard financing, or managing insurance costs. What an HOA cannot do is invent a restriction that was never adopted through the proper process, or apply one unevenly to different owners.
Whether a brand new restriction can be enforced against someone who already owns in the community is a separate question, and the answer depends on state law.
Montana’s Rule on New Rental Restrictions
Montana has a specific statute on this exact question. Under MCA 70-17-901, a homeowners association cannot adopt or enforce a covenant that places a more restrictive limit on how you use your property, including your ability to rent it out for any length of time, than what applied when you originally acquired the property. This rule took effect May 9, 2019, and it does not apply retroactively to anything the association did before that date.
A few details matter for owners:
- Consent changes the outcome. If you agree in writing to a new restriction, it applies to you.
- You can record your exemption. If a new rule does not apply to you, you can ask the association to record that exception with the county clerk and recorder, which protects you if the issue is ever disputed.
- The protection does not transfer to a buyer. If you sell, the new owner picks up whatever restriction was already in place at the time of purchase, even if you personally were exempt.
- It covers both types of Montana communities. The law reaches ordinary homeowners associations and condominium associations formed under the Montana Unit Ownership Act
In practice, this means a longtime Whitefish or Kalispell condo owner who has always been allowed to rent their unit cannot be shut out by a rental cap the association adopts next year, unless they agree to it. A buyer who purchases after that cap is already in place does not get the same protection.
Rental Caps and Non-Owner-Occupied Limits
Rental caps are usually expressed as a percentage of units, often somewhere between 20 and 30 percent, chosen because many mortgage lenders will not offer standard financing in a community above that non-owner-occupied threshold. Once a cap fills, associations typically run a waitlist, and an owner may need to wait for a rental slot to open before they can legally lease their unit.
Tenant Approval and Screening by the HOA
Some associations require owners to submit a lease or a prospective tenant for board review before move-in. This is worth approaching carefully. Tenant screening by an HOA can run into fair housing rules, since a policy that has a discriminatory effect can be challenged even without discriminatory intent. An HOA’s approval, when required, is a separate step from the owner’s own tenant screening and does not replace it.
Short-Term Rentals in HOA Communities
A ban on stays under 30 days is one of the most common rental restrictions, and it is enforced independently of whatever short-term rental permit a city or county requires. An owner in a resort town needs to clear both layers: the municipal zoning and permitting rules, and whatever the HOA’s own governing documents allow. Passing one does not satisfy the other.
What to Check Before You Buy or Lease in an HOA Community
- Read the current declaration, CC&Rs, and bylaws, not just a summary from the listing agent
- Ask directly whether a rental cap exists and whether a slot is currently open
- Find out when any rental restriction was adopted, and compare that date to your purchase date
- Get any required approval in writing, and keep it with your lease file
- Do not rely on a verbal assurance from a board member or manager
Frequently Asked Questions
Can an HOA stop me from renting my home?
Often, yes, if the restriction is properly adopted in the governing documents and applies to your ownership. In Montana, a restriction adopted after you bought generally cannot be enforced against you unless you agreed to it in writing.
Does a new HOA rental rule apply to me if I already own?
In Montana, no, not unless you consent in writing, thanks to MCA 70-17-901. That protection stays with you as the current owner and does not pass to whoever buys the property from you.
Can an HOA ban short-term rentals?
Yes, if the ban is written into the governing documents. It applies on top of any city or county short-term rental permitting requirement, not instead of it.
Can an HOA screen my tenant?
Some associations require lease review or tenant approval before move-in. This does not replace the owner’s own screening process, and any approval requirement should be applied consistently to avoid fair housing issues.
HOA rules add a layer that general landlord tenant law does not cover, and the two need to be checked separately before you list a unit for rent.
