Purchasing a home as an investment property to rent out may provide extra income. However, if you fail to abide by the neighborhood rules or pay fees set up by the HOA, you may lose that money.
In Florida, an HOA has the right to intercept rent proceeds in certain circumstances. Learn more about how you may lose money on a property you believed would generate revenue.
What are the rules?
When you close on a home, you acknowledge that the property is under the authority of an HOA. As part of your closing package, you receive a copy of the community’s Declaration of Covenants, Conditions and Restrictions or CCRs. The CCRs set the general rules of the community, including:
- The colors you may paint the home
- The procedure for making changes to the exterior of the home
- The type of business you may not operate
- The quiet hours of the community
If you do not follow these rules, the HOA may impose a fine you must pay within a reasonable timeframe.
What are assessments?
The HOA must maintain the community’s common areas and easements. These include amenities, such as parks and pools. Caring for these items takes money, and each homeowner pays the proportionate share through annual HOA assessments.
When can the HOA take rent?
If you do not pay assessments or fines when due, the HOA may take action to collect. The process typically starts with collection efforts and escalates to placing a lien on the property. If you continue to ignore these collection efforts, the HOA may file to intercept the rent from your tenant until you pay all the assessments owed.
When the HOA intercepts rent payments, it may strain your finances. Getting the advice of a professional who can explain your options may benefit your situation.