Indiana investors lost the vote on HOA rental restrictions in March
Indiana investors lost the vote on HOA rental restrictions in March
2026-09-10 · Indiana · Legislation
What happened. Buried in SECTION 225 of House Enrolled Act 1210 (Public Law 157-2026) — a 418-page bill about local government finance — is a provision that changes who is allowed to vote when an Indiana association decides whether to restrict rentals.1
It amends IC 32-25.5-3-11 to add:
“Beginning after the effective date of this subsection as added by HEA 1210-2026, only members of the homeowners association who use their property as a homestead (as defined in IC 6-1.1-12-37) are eligible to cast a vote on a matter regarding either of the following: (1) A prohibition or restriction of an owner of a privately owned residential property from using the property as a rental property. (2) A prohibition or restriction regarding the use of property as a rental property.”
The date is the story
Nearly everything the 2026 General Assembly did to Indiana association law took effect on 1 July 2026. This section did not. It was effective upon passage — the day the Governor signed, 12 March 2026.
That means any Indiana association that voted on a rental restriction between 12 March and 1 July 2026 was already subject to this rule, whether or not anyone involved knew it. Boards reviewing votes taken in that window should check who was counted.
What a homestead is
The provision borrows the definition at IC 6-1.1-12-37 — the property tax homestead standard deduction. That is a familiar and administrable test: it is the owner's principal place of residence, and it is a matter of county record rather than something a board must adjudicate.
The practical effect is that an owner who does not live in the property — an investor, a corporate buyer, an owner of a second home, someone renting the property out already — cannot vote on whether the community restricts rentals.
The developer carve-out
A developer is exempted from the restriction while it still owns lots within the association. Without that, a developer mid-build — who by definition does not homestead the unsold inventory — would be voteless on a question directly affecting the product it is selling.
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