Owner-Occupied Property Restriction Clause

Owner-Occupied Property Restriction Clause

An Owner-Occupied Property Restriction Clause is a provision often included in property deeds or leases that mandates the property must be occupied by the owner, rather than rented out or leased to tenants. This clause is designed to ensure that the property remains a primary residence, which can help maintain the character of a neighborhood, uphold property values, or comply with zoning regulations.

The Owner-Occupied Property Restriction Clause typically outlines the following key points:

1. Occupancy Requirement: The owner must reside in the property as their main home for a specified period, often defined as a certain percentage of the year.

2. Prohibition of Rentals: The clause may explicitly prohibit the owner from renting or leasing the property to others, thereby preventing it from becoming a rental property.

3. Consequences of Non-Compliance: If the terms of the clause are violated, the clause may provide for certain consequences, such as the right of the homeowner association or lender to impose penalties, or in some cases, to call the loan due.

For example, in a community governed by a homeowners association (HOA), an Owner-Occupied Property Restriction Clause may be used to ensure that all owners contribute to the community’s upkeep and that transient occupancy does not undermine the neighborhood’s stability. If an owner were to rent out their home without complying with the clause, the HOA might take action to enforce the restriction, which could include legal proceedings or fines.

Overall, Owner-Occupied Property Restriction Clauses serve to protect the integrity of residential communities and ensure that properties remain as intended—primarily for owner-occupants rather than for investment purposes.