Getting a good deal on a rental property governed by restrictions laid out in Homeowner’s Association, or HOA rules, means you as well as your tenants must conform to any of these guidelines set forth in the Covenants, Conditions and Restrictions.

Typically these rules aren’t any more onerous thanResidential Real Estate Investing forbidding owners to park an RV in the front yard.Still other more “hands on” affairs go a bit further and limit the exterior of your unit to certain colors or making sure the lawn is cut to a specific height.

CC&Rs are designed to help maintain property values and is a benefit to the property owners as well as any tenants. The homeowner’s association is funded by HOA dues, typically paid annually but can be paid monthly as well in most instances. In almost half the states however, HOA dues can take on a “super lien” status and can be a real problem if those dues become delinquent.

A super lien is so called because it automatically receives a superior position over a first mortgage, even if the lien is filed after the mortgage appears on the title report. A HOA monthly payment might be around $150 per month or so and is used to take care of insurance for the common areas, property management fees and maintenance costs. A super lien also has the ability to foreclose on a property for delinquent HOA dues.

For example, say that someone owns a unit with an HOA and the monthly HOA dues are $200. There’s also a first mortgage loan in the amount of $200,000. After six months of non-payment of the HOA dues, the HOA can file for a foreclosure, resulting in an automatic acceleration of the mortgage. This is why many lenders don’t finance real estate when a superior lien is possible and ask for a waiver or else there won’t be any financing. If the HOA doesn’t budge, it can be hard, if not impossible, to find traditional financing.