Renting Out a Colorado HOA Unit: What the Association Can (and Can't) Restrict

Everything else on this site is about state and local government requirements. This one’s different — it’s about a private layer of restriction that can sit on top of all of it if the rental unit is in an HOA-governed community: condo, townhome, or a planned community with a homeowners association.

The 67% rule: a board can’t just impose a rental ban

Under C.R.S. § 38-33.3-217(4.5), an amendment to the declaration that restricts what a unit can be used for — including a new rental restriction — requires approval from owners holding at least 67% of the association’s votes (or a higher threshold if the declaration itself sets one). A board vote alone, or a simple rule change, doesn’t meet this bar. If an HOA is trying to enforce a “no rentals” policy that was never actually approved by a 67% supermajority and recorded, that policy may not be enforceable as written.

The restriction has to be in the recorded declaration

A rental restriction has to actually live in the recorded declaration — the association’s governing document filed with the county — not just in a board resolution, a newsletter, or a verbal policy. Colorado courts have also found that short-term rentals aren’t automatically a “commercial use” barred by a generic “residential use only” covenant; an HOA that wants to specifically restrict short-term rentals generally needs language that says so.

Owners who bought before a new ban may be grandfathered

Colorado case law generally protects an owner who purchased before a new rental restriction was adopted — the restriction often doesn’t reach back to bind them. This grandfathering comes from court decisions, not a specific statutory line, so it’s fact-specific and depends on the details of when the purchase happened relative to when the restriction was recorded.

There’s a floor on how low a rental cap can go

Associations that do adopt a rental cap generally can’t set it arbitrarily low — courts have limited how restrictive a cap can be, with a commonly cited floor around 25% of units. A cap set well below that is more likely to face a legal challenge. Separately, an HOA can still prohibit short-term or transient rentals (commonly defined as 30 days or less) even where longer-term rentals are permitted up to the cap.

What to check before assuming an HOA restriction applies to you

• Is there an actual recorded declaration amendment restricting rentals, or just a board policy that was never put to an owner vote?
• If a restriction was adopted, was it approved by at least 67% of the association’s votes?
• Did you purchase before or after the restriction was adopted — grandfathering may apply if you bought first?
• Does the restriction target rentals generally, or specifically short-term rentals — the two aren’t automatically the same thing?

The bottom line

An HOA restriction, if validly adopted, sits on top of — not instead of — everything covered elsewhere on this site. It doesn’t replace state and local compliance requirements, and an HOA can’t create binding rental restrictions through a shortcut that skips the 67% vote and recording requirement.

LeaseCheck for Landlords is an educational lease-compliance screening tool. It is not a law firm and does not provide legal advice. Colorado rental laws change; confirm specifics for your situation with a licensed attorney.