CRANBERRY TWP — A resident of the Freedom Woods housing plan says the homeowners association’s board overstepped its bounds when it voted to restrict the number of rentals allowed in the plan.

Kelsey Niebauer, who owns a townhome in the community, said the seven-person board in May approved a resolution to restrict the number of homes in the plan that can be rented to 5 percent.

But Niebauer said the association’s bylaws and covenants state that all units may be rented and that the board must get the support of 67 percent of the plan’s homeowners to change the rental rate.

According to the Freedom Woods website, the plan has 144 townhomes and 131 single-family homes on 69 acres off Freedom Road. It was established in 1987.

Niebauer said she was told by the association’s attorney, Ed Kress, that the board’s action was justified by the “business judgment rule,” which allows board members to make a decision they believe is good for the community without seeking a vote by the association members.

“I believe that this sort of action opens the door to an abuse of power by an HOA board,” she said.

Niebauer said the residents must abide by the covenants and bylaws they agreed to when they bought their homes, and the association board should be held to the same standard.

“A vote should have been taken, and that is all I am asking for,” she said.

Niebauer said there are 15 rented townhome units in Freedom Woods. She said those who own townhomes want the option to rent them if they buy a house or move away.

Niebauer has owned her townhome since 2011, and wants that option if she decides to move.

Kress said the bylaws state that association members must notify the board when they rent their property, and that hasn’t occurred in some cases. He said the association board wants to know who is living in their properties in the interest of public safety.

“There are problems with these rental properties,” Kress said.

He said during the process to approve a mortgage or refinancing, mortgage companies and banks send a questionnaire to the board asking if 5 percent or more properties are leased.

“The board is looking out for the homeowners,” Kress said.

Regarding the business judgment rule, he said the board used it appropriately.

“Sometimes you just have to say ‘We do have the ability to regulate property and that’s what we’re going to do,’” Kress said.

Niebauer, who is a law school graduate and is as a loan processor for a bank, said the questionnaires that Kress mentioned do exist. But she said few, if any, require a 5 percent ceiling on leased properties as Kress claims.

“That is 100 percent false,” Niebauer said.

She said her bank does send such a questionnaire to a client’s prospective homeowners association, but there is no leasing ceiling and the information on rental percentage does not affect the approval of the mortgage or refinancing.

She said the stringent Federal Housing Authority requirements have a cap of 50 percent of rented units in the questionnaire it sends to homeowners associations.

Kress said he will recommend to the board that it amend the plan’s covenants and bylaws to include the 5 percent leasing rule.

He thinks the action will easily pass in a vote among association members because only one resident voiced opposition to the resolution when a letter describing it was sent to all homeowners.

“It’s my legal opinion that it’s always best to amend the declaration (of bylaws and covenants),” Kress said.

Niebauer said she will circulate a petition in the plan opposing the resolution.