Lease/purchase contract breaks CCRs

I signed a lease purchase agreement for a home in a community whose HOA covenants forbid renting.
The owners agent who drew up the lease also lives in and specializes in properties in this community. He knows that the HOA rules prohibit leases, but represented a lease/purchase as something different.
I told him that I did not want to break any rules. (My wife wanted the house, I was secretly hoping we would not qualify) When we got the keys he said "if anyone asks, tell them you are buying the house". Then I knew something was up. My nice neighbor turns out to be the vice-president of the HOA and was constantly asking questions about my home purchase agreement. His wife was a competing realtor in the area. When the economy tanked my business slowed to the point that I had no desire to pursue the home purchase and the home value dropped $175,000 below my lockin price. I moved out at the end of the first year of a two year agreement. Behind about 3 months rent.

They are not very agressive at pursuing the 2nd year of the lease. I would consider paying the last 3 months of the first year, although they knew what they did was wrong.

Homeowners sign a contract stating they will not rent out homes. After the 11th month of my lease the HOA revisited the issue and raised the fines on home owners to $5000 + $1000/mth after written warning.

Was this a valid and binding lease agreement?

Link to HOA documents.
And it was actually in the 6th month of the lease that they raised the fines on unauthorized leasing.


Agritopia - Resource Center

You have to pay for the time you were there but if the knowingly entered into a fraudulent agreement they will have trouble enforcing that in any court--

[sandyclaus]

The property owner can feasibly do what they want - especially if they are willing to pay the consequences.

They are not looking to YOU to pay the penalties, are they (the $5000 plus additional $1000/mo)?? Because if this is the case, then you definitely have a lawsuit to challenge the owners. Their choice to accept the consequences of renting when it isn't allowed by their HOA should not be a penalty you should have to pay on their behalf.