Can an HOA Restrict What I Do in My Own Property
My question involves real estate located in the State of: California
The CC&R of my HOA says:
"No condominium shall be occupied and used except for residential purposes by the owners, their tenants, and social guests, and no trade or business shall be conducted therein, except that Declarant, its successors or assigns, may use any unit or units in the project owned by a Declarant for a model home site or sites and display and sales office during construction and until the last unit is sold by Declarant, or until three (3) years from the date of closing of the first sale in the latest annexed phase of the project, whichever occurs first."
As for the "no trade" part, that seems as if it would preclude me from hiring a cleaner or other maintenance worker and paying them on the premises.
Does it mean I can't sell something from my home via Ebay?
Does it mean I can't make a painting in my home and sell it at an art exhibit? What if I make a painting at home and sell it to a guest who visits my house?
What if someone living in my home is a consultant (has their own consulting company) for XYZ company rather than a direct employee. Does it mean they can't do any work from home?
Does an HOA actually have the authority to dictate what I do inside my own home?
Thanks in advance to those who can contribute to this.
Re: Can an HOA Restrict What I Do in My Own Property
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Lizard
My question involves real estate located in the State of: California
The CC&R of my HOA says:
"No condominium shall be occupied and used except for residential purposes by the owners, their tenants, and social guests, and no trade or business shall be conducted therein, except that Declarant, its successors or assigns, may use any unit or units in the project owned by a Declarant for a model home site or sites and display and sales office during construction and until the last unit is sold by Declarant, or until three (3) years from the date of closing of the first sale in the latest annexed phase of the project, whichever occurs first."
As for the "no trade" part, that seems as if it would preclude me from hiring a cleaner or other maintenance worker and paying them on the premises.
Does it mean I can't sell something from my home via Ebay?
Does it mean I can't make a painting in my home and sell it at an art exhibit? What if I make a painting at home and sell it to a guest who visits my house?
What if someone living in my home is a consultant (has their own consulting company) for XYZ company rather than a direct employee. Does it mean they can't do any work from home?
Does an HOA actually have the authority to dictate what I do inside my own home?
Thanks in advance to those who can contribute to this.
Is this a hypothetical, or do you actually have a business venture in mind?
Re: Can an HOA Restrict What I Do in My Own Property
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Lizard
Does an HOA actually have the authority to dictate what I do inside my own home?
Short answer is yes, it does. When you buy a home subject to a HOA you agree to the CC&Rs that go with it. If those provisions say you cannot conduct a trade or business in the home then the HOA can enforce that provision. Now, creating a painting and selling it in a gallery or whatever is not likely to raise the ire of any reasonable HOA since the purpose of this kind of provision is to prevent the traffic into the HOA that a business creates, along with the noise and other things that can go along with a business that may disrupt a neighborhood. But not all HOA boards are reasonable; if you get people on the board that are little dictators and like to weild their authorit to regulate every little thing you can do they might find creating paintings for sale to violate the CC&R and get you into a fight that might take you to court to settle if that is something that falls under what the CC&Rs were meant to do. It is precisely because HOA boards can attract the dictator types that I refuse to buy a home subject to a HOA. But I do get that some people like HOAs. I’m just not one of them.
Re: Can an HOA Restrict What I Do in My Own Property
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Taxing Matters
some people like HOAs.
Ben Franklin was clairvoyant. He foresaw HOAs before they even existed.
Quote:
"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."
Re: Can an HOA Restrict What I Do in My Own Property
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Taxing Matters
Short answer is yes, it does. When you buy a home subject to a HOA you agree to the CC&Rs that go with it. If those provisions say you cannot conduct a trade or business in the home then the HOA can enforce that provision. Now, creating a painting and selling it in a gallery or whatever is not likely to raise the ire of any reasonable HOA since the purpose of this kind of provision is to prevent the traffic into the HOA that a business creates, along with the noise and other things that can go along with a business that may disrupt a neighborhood. But not all HOA boards are reasonable; if you get people on the board that are little dictators and like to weild their authorit to regulate every little thing you can do they might find creating paintings for sale to violate the CC&R and get you into a fight that might take you to court to settle if that is something that falls under what the CC&Rs were meant to do. It is precisely because HOA boards can attract the dictator types that I refuse to buy a home subject to a HOA. But I do get that some people like HOAs. I’m just not one of them.
If one does conduct a business in their home against the rules cited in the CC&Rs, on what grounds would they be able to collect damages from you if what you did didn't create any additional traffic flow?
Owner: What is the purpose of the 'no business' clause in the CC&R?
HOA: To prevent additional traffic which a business creates
Owner: Do you have any documentation or evidence that anything I did in my residence created additional traffic that a business would typically create?
HOA: No
What's the civil court judge going to say then?
Re: Can an HOA Restrict What I Do in My Own Property
What sort of actions or penalties do the rules provide?
As to what can a court give? Depends on what the hoa asks for.
and a more likely rendition of the trial
judge: did you engage in activities prohibited by the hoa rules?
you: yes...but
judge: I didn’t ask for a story
you: but
iudge: when I want an anatomy lesson I’ll ask you. Until then, be quiet.
Judge to hoa: did the other guy violate the rules?
hoa: yep
iudge: I find for the hoa.
While you want to argue it’s ok to break the rules since you claim it has not created a traffic jam (yet), the reality is the reason to stop your activities now is so it never gets to the point the activities are a problem. If they allow a business to operate and don’t take action when it becomes known, it can develope into a possible defense for the business owner. It also means 47 other owners will complain that they didn’t get to operate their business out of their home. It also will cause 13 owners to be emboldened and start their own home based business.
Before you know it it’s going to look like an industrial complex.
Oh, and every time the hoa has to sue a property owner, they will have to apply a special assessment to all owners to pay their legal fees
if you don’t want to live with hoa rules, don’t live where there is an hoa. Taxing Matters has chosen to do so. I live without an hoa. In fact, of the people I know, a small minority live under an hoa.
Re: Can an HOA Restrict What I Do in My Own Property
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jk
and a more likely rendition of the trial
judge: did you engage in activities prohibited by the hoa rules?
you: yes...but
judge: I didn’t ask for a story
you: but
iudge: when I want an anatomy lesson I’ll ask you. Until then, be quiet.
Judge to hoa: did the other guy violate the rules?
hoa: yep
iudge: I find for the hoa.
I have been in small claims court enough times to say that it does NOT go that way.
In fact, it is my experience that if you say "yes" I violated the rules, that the judge is so surprised that he is interested in asking more questions to find out why you are there in the first place.
There are many things that people can do in the privacy of their own home, that would in no way justify an HOA in trying to stop you by stating that you were "running a business" in your home.
An author could be writing a book.
A Painter could be painting.
A customer service rep could be working in a work from home position
Any professional person could make appointments and do paperwork at home because they have no actual office.
Service techs could also do paperwork and make appointments from home for the same reason.
Plus any number of other things that an HOA would never even notice because it in no way created any disturbance in the community.
Do you honestly think that a judge would consider any of that violating a rule about running a business in someone's home?
Re: Can an HOA Restrict What I Do in My Own Property
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llworking
I have been in small claims court enough times to say that it does NOT go that way.
In fact, it is my experience that if you say "yes" I violated the rules, that the judge is so surprised that he is interested in asking more questions to find out why you are there in the first place.
There are many things that people can do in the privacy of their own home, that would in no way justify an HOA in trying to stop you by stating that you were "running a business" in your home.
An author could be writing a book.
A Painter could be painting.
A customer service rep could be working in a work from home position
Any professional person could make appointments and do paperwork at home because they have no actual office.
Service techs could also do paperwork and make appointments from home for the same reason.
Plus any number of other things that an HOA would never even notice because it in no way created any disturbance in the community.
Do you honestly think that a judge would consider any of that violating a rule about running a business in someone's home?
Small claims court? What makes you think this would be filed in small claims court? I would guess it can’t be filed in small claims court (but admit I have not check
and you really miss the hoa rules are agreed to by the homeowner. It isn’t like somebody walks up and says; this is the rule. You choose to live where these rules are.
As to what is allowed; seriously, read what the op posted. Your suggestions, for a great part, are not prohibited by the rule posted.
Re: Can an HOA Restrict What I Do in My Own Property
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jk
Small claims court? What makes you think this would be filed in small claims court? I would guess it can’t be filed in small claims court (but admit I have not check
and you really miss the hoa rules are agreed to by the homeowner. It isn’t like somebody walks up and says; this is the rule. You choose to live where these rules are.
As to what is allowed; seriously, read what the op posted. Your suggestions, for a great part, are not prohibited by the rule posted.
If so (the bolded) then please re-read the OP's original post and answer it accordingly.
Re: Can an HOA Restrict What I Do in My Own Property
Having been a member of an HOA board here's my take: if the OP's business does nothing to draw attention to itself, no customers come to the home, he does not register an LLC at his address, there's no negative impact on his neighbors from excessive noise or noxious smells, etc. then no one is going to complain to the HOA.
There are also activities that are hobbies rather than bona-fide businesses, though the hobby may show a profit some years and of course income taxes are due on that. Creating artwork to sell could certainly fall into that category.
Re: Can an HOA Restrict What I Do in My Own Property
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Lizard
If one does conduct a business in their home against the rules cited in the CC&Rs, on what grounds would they be able to collect damages from you if what you did didn't create any additional traffic flow?
The CC&Rs might provide some monetary fine the HOA may levy for violations. Even if it doesn’t have that and it cannot show actual damages, it could still sue for an injunction to prohibit you from continuing the offending activity. Then if you violate the injunction the court can impose monetary penalties or even jail you for contempt of court.
Note that the issue will be what was intended by the parties in adopting the term “trade or business.” If the case is tried to a jury, it would end up being the jury that decides it, not the judge.
Re: Can an HOA Restrict What I Do in My Own Property
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Taxing Matters
The CC&Rs might provide some monetary fine the HOA may levy for violations. Even if it doesn’t have that and it cannot show actual damages, it could still sue for an injunction to prohibit you from continuing the offending activity. Then if you violate the injunction the court can impose monetary penalties or even jail you for contempt of court.
Note that the issue will be what was intended by the parties in adopting the term “trade or business.” If the case is tried to a jury, it would end up being the jury that decides it, not the judge.
I just cringe at the idea of an HOA spending the money to go to trial over an issue where its not clear that the homeowner is operating a trade or business. That is just crazy. As a member of an HOA I wouldn't want its money being spent so foolishly. But then, I will never live in a neighborhood with an HOA.
Re: Can an HOA Restrict What I Do in My Own Property
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llworking
I just cringe at the idea of an HOA spending the money to go to trial over an issue where its not clear that the homeowner is operating a trade or business. That is just crazy. As a member of an HOA I wouldn't want its money being spent so foolishly. But then, I will never live in a neighborhood with an HOA.
I’m right with you on that. The sad thing is that some HOA boards would do it because they are very much about asserting their power in the HOA and keen on ensuring that everyone does things just the way they think it should be done., however unreasonable that might be. For HOA residents who like conformity and share their HOA boards view of how everyone should do things I’m sure HOA life is great under those kind of dictatorial boards. For everyone else, though, those kinds of HOA boards are a nightmare. I am not bashing all HOAs; I’m sure a number of them have quite reasonable boards and CC&Rs that aren’t too burdensome. I have however represented some clients against overeaching and unreasonable HOA boards and know first hand the nightmare HOAs are out there. The problem for me is that it can be difficult to know just how bad a HOA board really is until after you buy the home. And I am not willing to risk buying a home in what turns out to be a nightmare HOA. I’ll let others roll the dice on those homes. :D