By Prerna Kapoor, CLHMS | REAL Brokerage | July 27, 2026
A client called me a few weeks ago with a good problem. She and her husband are being relocated to Japan for two years through her company, and instead of selling their Highlands Ranch townhome, they wanted to rent it out and come back to it later. Reasonable plan. Then she read her HOA’s rules and saw a rental cap that made her nervous. So we pulled the actual declaration, not just the rules handout, and the cap she was worried about turned out to not even be enforceable the way she’d been told.
That gap between what an HOA rule says and what Colorado law actually requires trips up a lot of buyers and owners. If renting your home out is even a maybe for you, a relocation like hers, a future investment plan, or just wanting the option, this is worth understanding before you write an offer, not after you already own.
What Colorado Law Actually Requires to Restrict Rentals
Under the Colorado Common Interest Ownership Act, an HOA cannot add or tighten a rental restriction with a simple board vote. Amending the declaration to change how a unit can be used, including a new rental restriction, requires approval from owners holding at least 67% of the votes in the entire association. Not 67% of the people who show up to a meeting, 67% of the whole association’s voting power. That’s a real supermajority, and it’s set in state law under C.R.S. Section 38-33.3-217(4.5).
The declaration itself has to contain any use restrictions in the first place, under C.R.S. Section 38-33.3-205(1)(l). Colorado’s Division of Real Estate, which runs the state’s HOA Information and Resource Center, has been direct about this in its own guidance: if the governing documents are silent on rentals, the association does not have the power to adopt a rule restricting how owners use or occupy their units.
A Board Rule Alone Doesn’t Count
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This part surprises people. A 2015 Colorado Court of Appeals case, Houston v. Wilson Mesa Ranch Homeowners Association, settled that a rental prohibition can’t be created through a board vote or a change to the rules and regulations. It has to go through a full declaration amendment, voted on by the entire community at that 67% threshold.
So if you’re reading an HOA packet and see a rental cap listed only in a rules-and-regulations document, not in the recorded declaration, that restriction is standing on much shakier ground than it looks. Boards can still adopt policies for things like noise, trash, or parking tied to a rental, that’s different from banning or capping rentals outright.
Does a New Rule Apply to You If You Already Own?
Generally, no, and this is the part that matters most for someone already living in the home. Colorado courts have limited how far back a newly adopted rental restriction can reach, so an owner who bought before the restriction was adopted usually isn’t bound by it. That protection comes from case law on retroactive covenants, not from the statute itself, so the specifics can vary. What’s clean and simple is a restriction that was already recorded in the declaration when you bought. That one applies to you from day one, no argument.
What to Check Before You Write an Offer
If renting the home is part of your plan, even a maybe, ask for these before you’re under contract:
The recorded declaration, not the rules handout. Rental restrictions that actually bind future owners live in the declaration. Anything else is easier to challenge.
When any restriction was adopted, and by what vote. A rental cap added last year by the board alone is a different situation than one that’s been in the declaration since the community was built.
Board meeting minutes for anything pending. A community currently collecting the 67% needed to add a new restriction is worth knowing about before you close, not after.
Local licensing on top of HOA rules. Cities like Denver and Colorado Springs require their own rental licenses for short-term and, increasingly, long-term rentals. Your HOA allowing rentals doesn’t mean your city does automatically, the two rules stack.
Where This Matters Most
I see this come up most with condos and townhomes in Douglas and Arapahoe County communities, where rental caps are common because lenders sometimes hesitate on financing in buildings with high investor concentration. If a future rental is part of your thinking at all, even loosely, it belongs in the conversation before you fall for a model home or a great kitchen. I’d rather walk a client through the actual declaration language on day one than have them find out at day 400 that their plan doesn’t work.
Quick answers
Can my HOA board just vote to ban rentals? No. A rental restriction has to be added through a declaration amendment approved by owners holding at least 67% of the association’s votes, not a simple board vote.
If my HOA adds a rental ban after I buy, does it apply to me? Usually not. Colorado case law generally protects owners who bought before a new restriction was adopted, though the specifics are fact-dependent.
Where do I find out if my community actually restricts rentals? Ask for the recorded declaration and any amendments, not just the rules and regulations packet, before you’re under contract.
If you’re weighing a purchase with future rental flexibility in mind, I’m always happy to help you read through the actual declaration before you write an offer. My general HOA guide covers the basics every Colorado buyer should know, and if the rental plan is really an investment plan, my house-hacking guide walks through how that math tends to work in this market. Condo and townhome buyers specifically should also look at what’s happening in Colorado’s condo and townhome market right now, since rental caps show up there more than anywhere else.
You can read the Colorado Division of Real Estate’s own HOA rental restrictions guidance, and see how city-level rules stack on top of your HOA’s in my guide to Colorado’s short-term rental laws.
Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner
Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.
