Planning commission votes to lift owner-occupancy restriction for Nearwater Place, applicant adds CCR leasing rules

The Hendersonville Planning Commission recommended removal of a blanket owner‑occupancy restriction for the Nearwater Place final development plan, voting 5–3 to lift the zoning condition and accept a developer proposal to record new restrictive covenants that limit and regulate leasing.

Real Estate Solutions Group asked the commission to remove a city-imposed requirement that units be owner-occupied. The restriction was originally placed on the development at the point of approval several years ago. Developer attorney and representative Brad Ealy told the commission that the restriction has hampered sales and that the builder had sold a small number of units at loss to generate interest. He said the project is otherwise complete and that market demand includes prospective renters.

As an alternative to leaving the owner‑occupancy restriction in zoning, the applicant offered recorded, enforceable covenants (CC&Rs) that would limit leasing: leases must be for entire units, there may be no subleasing, short‑term and transient rentals (Airbnb/VRBO) would be prohibited, leases would require board approval and be provided in writing to the HOA within 10 days, and minimum lease terms would be six months. The draft CCRs also included a cap on occupancy tied to bedroom count (number of bedrooms plus one). The applicant said the recorded covenants remove the developer’s unilateral ability to change leasing restrictions and would give the city greater leverage if future changes were sought.

Commissioner debate divided on principle and precedent. Commissioner Evans argued the commission should “get out of the business” of restricting rentals and recommended removing the zoning restriction entirely. Commissioner Silkwood said the owner‑occupancy restriction was self‑imposed during the prior approvals and that she was not inclined to give the applicant relief after that pledge. Several commissioners expressed concern about consistency, HOA governance and long‑term enforcement and asked whether a single investor could acquire multiple units and control HOA votes; the applicant said he did not see that as a practical harm and argued centralized ownership might enhance enforcement.

After discussion Commissioner Evans moved to recommend removal of the zoning rental restriction; the motion was seconded and carried by an electronic roll call, 5–3. The commission approved the applicant’s approach to record CCRs that restrict transient rentals and require HOA oversight of leasing, while removing the zoning-era owner‑occupancy requirement.

Action: The commission’s motion removed the owner‑occupancy restriction from the zoning condition for Nearwater Place and endorsed returning the matter to staff for final ordinance technicalities; the vote was 5 in favor, 3 opposed. The case will proceed to the Board of Mayor and Aldermen or applicable legislative body as a planning commission recommendation (the Planning Commission does not itself amend zoning by ordinance).

Ending: The developer said it will record covenants that prohibit short‑term rentals, require leases to be provided to the HOA and set a six‑month minimum lease term. Commissioners asked staff to ensure the recorded instrument is clear, enforceable and presented to their legislative body as part of the final action.