What Is the 80/20 Rule in Active Adult Communities?

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

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Before moving into an active adult community, it\'s important to fully understand the rules and regulations.
55 and over community rules 55places.com
Before moving into an active adult community, it’s important to fully understand the rules and regulations.

While researching the perfect 55+ community, you may have come across the statement that 80% of the units must be occupied by at least one person who is 55 years of age or older.

Why 80%? What happens with the other 20%? Are there any exceptions to this rule?

The answer, as you probably assumed, is a bit complicated. While the law may seem to be clear, it’s actually mired in concerns over housing discrimination. The Federal Fair Housing Act prohibits “denial of housing or real estate transactions based on race, color, religion, sex, national origin, handicap and familial status.” One notable exception: age.

But wouldn’t setting an age minimum violate the familial status category? Not quite, thanks to the Housing for Older Persons Act of 1995 (HOPA). While the familial status category includes protection for pregnant women or children under the age of 18, HOPA overrides this protection if a community meets at least one of the following conditions: all occupants are 62 or over OR 80% of all the occupied units have at least one individual 55 or over.

In other words, that 80% is not an arbitrary number, but rather the legal minimum a community must adhere to in order to enforce the age-restriction and qualify as an adult community.

The 20% 

So what about the remaining 20%? Many people misinterpret this rule, thinking that a community simply lifts the age restriction for the remaining units. The 20%, in reality, is to allow some flexibility should an issue arise that violates the age-restriction.

For example, a couple ages 52 and 57 move into a 55+ community. Shortly thereafter, the 57-year-old resident passes away, leaving the 52-year-old to occupy the home. Although this technically violates the “one occupant must be 55 or over” rule, the underage resident can remain in the home, counting towards the 20% “wiggle room” that each community is allowed.

As long as the community demonstrates an intent to provide housing for occupants who are over 55, goes through the processes to verify their age, and has an 80% occupancy rate of those who meet the age-restriction, then the 20% is, legally speaking, for the community to do with as they please.

Most communities, in keeping with the spirit of an active adult neighborhood, will try to maintain the age-restriction in 100% of the households. But this, of course, varies by community. Although some boards and covenants have strict regulations regarding adult children living with their parents in a 55+ community, some have relaxed their requirements to allow some flexibility.

Four Seasons at Monroe, for instance, has no restrictions on adult children (19 and over) living with their parents within the community. This is a reaction to what they term the “boomerang generation” who are returning to live at home after living on their own temporarily or graduating college.

But this is the exception, as most communities will keep the age-restriction as uniform as possible throughout the neighborhood, so you can sit back, relax, and enjoy the company of like-minded neighbors.

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

55places Mortgage is a joint venture between Mutual of Omaha Mortgage and 55places.com.
Details here.

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I agree that 55places and its affiliates, partner providers or agents may call, text, or email me about my inquiry, which may be made with automated means. I understand that my consent is not a prerequisite for buying a property. I may revoke my consent at any time by contacting optout@55places.com. Message/data rates may apply. I also agree to 55places.com’s Privacy Policy and Terms of Use.

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About 55places

We’re changing the way people 55 and older are searching for their perfect next place. With a national network of hand-selected real estate experts, plus comprehensive information, unbiased content, and on-the-go insight about thousands of communities across the country, we’re a trusted resource paving the way from here to home. Whether you’re interested in a low-maintenance single-level residence, an active lifestyle or age-qualified community, an intimate enclave, or anything in between, we can help you make your next move the best one yet.

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