”We’re from out of town,” she explained, “and here just for the weekend.”

Her voice was heavy with anticipation over the wonderful investment she and her husband wanted to make in Provo with its large student population of potential off-campus renters.  So I explained the features and benefits of the townhouse, but then asked her to whom she wanted to rent it.

Students, she replied, so I explained it was outside the Brigham Young University off campus housing area for single undergrads, but it could still be rented to graduate students or a married couple. But if she rented it to single, unrelated graduate students, or Utah Valley University students, a Provo ordinance restricts the number of tenants to three, even though it had five bedrooms. 

”Oh,” she said with disappointment in her voice, “that isn’t going to work for us.”

She wasn’t the first investor to be derailed by Provo’s quirky restrictions. I received a call once from an investor from California who wanted to buy several condos near BYU and load them up with students. He was getting ready to make a trip back here to pick them out. But when I explained the three-unrelated-tenant rule he never made the trip.

Some folks think that if they buy a condo and put two siblings in it they can still add two more unrelated tenants. Not so, says Provo zoning administrator Rita Trimble. They can just add one more tenant. Two siblings living together do not constitute a family, according to the definition.

Provo ordinances even affect married students. Another client was looking for a home with an accessory apartment near the campus where they could put their two married children and their families. They found the perfect home, so they thought, until they discovered that they had to live there to have another family in the basement. Provo’s accessory apartment ordinance requires that to rent out the apartment the home has to be owner-occupied. So why not put one of the kids on title, I suggested. 

That won’t work either, Trimble said. The city has strictly defined family as it relates to ownership and forbids parents sneaking their kids on title just so they can meet the accessory apartment ordinance. The rules are not cut and dried and can be confusing even to a city planner who said parents could put an adult child on title to meet the ordinance.

”I’ll have to have a talk with him,” Trimble said.

The three-singles-per-unit rule is an enforcement problem, as is the accessory apartment rule. Often homeowners start out renting their basements legally, but then the owner moves and rents out both units, which is a violation of the zoning code. In fact, it isn’t unique to Provo as other college towns deal with these issues as well, Bill Pepperoni of the city planning department said. 

Several years ago Provo allowed only two unrelated tenants per unit, which was appealed to the state legislature where it was changed to allow three. Former city councilwoman Cynthia Dayton was on the council then and remembers the change. The two-tenant rule wasn’t profitable, she said, while the three-tenant rule allows a reasonable profit for the landlords, just not as much as four or more tenants. Still, Provo ranks high nationally in profitability for investors, said Dayton, who is also a landlord.

On the other hand, if tenants are closely related, there could be several families and lots of people living in a Provo home, she said.

Provo’s population numbers about 120,000 with 72,000 renters, or 60 percent of the population. That’s huge in maintaining a city. That kind of turnover impacts schools, traffic, parking and other elements of city living. 

Still, the three unrelated rule isn’t always the rule.  Other factors may enter in, such as individual contracts; old rules that have been “grandfathered” in, making the home non-conforming, though legal; or other issues including the physical capacity of the home itself. Apartment buildings, on the other hand, more than likely don’t need to meet the same requirement based on their pre-existing zoning. 

”The best policy,” Trimble says, “is to call a Provo zoning officer before purchasing any property and get (occupancy allowances) in writing.”

That may cost a fee, but not near as much as buying a home and then not being able to do with it as the buyer intended.

Rodger L. Hardy is a Realtor affiliated with Prudential Utah Real Estate and a former real estate editor. For answers to your real estate questions please email him at rhardy@utahresidentialEteam.com.