HOA vs short term rentals – it has long been an issue and continues to cause problems in many communities. Homeowners want to rent out their houses or spare rooms, while associations aim to preserve community standards and property values. This clash often results in tension, disputes, and even legal action.
HOA vs Short Term Rentals: Determining Authority
Is Airbnb not allowed in HOA communities? The answer to this question is quite nuanced, not a simple yes or no. There are numerous variables to consider, and even within the same state, two HOAs can have different policies.
Whether or not an HOA can prohibit short term rentals (STRs) depends on two things: state laws and the governing documents. Let’s take a closer look at each of these factors below.
State Laws
State laws play a crucial role in determining what HOAs can and can’t do. Most states permit HOAs to enforce short-term rental restrictions, provided these restrictions are outlined in the governing documents.
In California, for example, Civil Code Section 4741 allows associations to prohibit STRs in their governing documents for a period of 30 days or less. Association boards should always check their state laws and consider consulting a lawyer to understand the extent of their authority.
Governing Documents
An HOA’s authority also comes from its governing documents, specifically the CC&Rs, bylaws, and operating rules. Some states defer to an HOA’s governing documents and only allow rental restrictions if these documents explicitly detail them.
Associations may use more general terms to prohibit rentals, but this might not hold up in court. Some key clauses include:
- Residential Use Only. This clause prohibits commercial operations. Some boards interpret frequent short-term rentals as commercial activity rather than residential use.
- Commercial Activity Not Allowed. STR platforms, such as Airbnb, are sometimes considered commercial businesses, triggering this restriction.
- Single-Family Residence. This clause may be used to argue that high-turnover rentals violate the intent of family-oriented occupancy.
- Nuisance Clauses. If rentals generate excessive noise, traffic, or disruption, boards may enforce nuisance restrictions.
Since these clauses don’t outright address STRs, owners can argue that they’re not in breach of them. Because of this, boards must ensure that their interpretation of these clauses is legally defensible. It’s even better to have other, clear language in the CC&Rs that support STR restrictions.
Can HOA Ban Short Term Rentals?
Can an HOA ban Airbnb? Again, it depends on state laws and the governing documents. Generally, HOAs do have the authority to ban Airbnb or rentals if the CC&Rs or bylaws reflect this prohibition.
If the governing documents lack clear rental provisions, courts often side with homeowners. It is not advisable to lump in rental restrictions with other clauses, such as “residential use only” or “commercial use not allowed.” These clauses tend to be broad, so they are not specific to rentals.
Changing State Laws and Local Ordinances
Cities and states are increasingly making an effort to regulate short-term rentals, particularly given their impact on local communities. Some jurisdictions now require STR owners to register annually with the city, pay taxes, and meet specific safety requirements.
For associations, courts have consistently ruled that bans or restrictions on STRs must be clearly outlined in the governing documents. If an HOA wishes to impose such limits, it must either already have them in the CC&Rs or amend the CC&Rs to include them.
Amendments typically require a majority vote of approval from the membership. The board can’t simply pass a resolution to prohibit or restrict rentals in the community.
There’s also the issue of grandfathering. In Florida, amendments that prohibit rentals for less than six months or limit rentals to fewer than three per calendar year apply to all owners, as per Section 720.306 of the HOA Act. That means the rule applies to everyone regardless of how they voted for the amendment.
Yet, under the Florida Condominium Act, Section 718.110 states that amendments that prohibit leasing, change the term length of rentals, or limit the number of rentals apply only to owners who consent to them and to owners who purchase a unit after the effective date of the amendment.
Legal Risks of High-Turnover Rentals
There’s a reason why associations prefer long-term rentals over short-term rentals. STRs typically have a high turnover rate, and this can bring both legal and financial risks to the HOA.
When it comes to HOA vs Airbnb, the following risks support the case against STRs:
- Insurance Difficulties. Frequent rentals may void standard homeowner policies or leave gaps in the association’s liability coverage.
- Security Concerns. Unfamiliar guests are a frequent source of concern for the safety of long-term residents.
- Nuisance Issues. Transient renters can cause noise issues, parking disputes, and overcrowding.
- Investment Risk. Too many STRs can lower property values because they deter long-term buyers. Lenders may also deem high-STR communities as riskier, making it more difficult for buyers to secure a mortgage.
What to Include in an HOA Short-Term Rental Policy
Every homeowners association should have an STR policy in place. This policy should be clearly indicated in the governing documents, specifically the CC&Rs. Here’s what to include in HOA short term rental rules.
1. Type of Prohibition
The policy should define whether rentals are outright banned or only limited. Some HOAs choose to impose a complete ban, citing the negative impact of STRs on the community. Meanwhile, others allow STRs but only up to a certain extent.
2. Length of Rental Duration
The policy should specify the minimum rental period that the HOA allows. This will discourage nightly or weekend rentals, which often cause noise or traffic issues.
3. Registration Requirement
Associations should also require owners to register their rental properties with the board before listing them for rent. This includes the owner’s contact information, details of the rental and the rental platform, and proof of compliance with local permits. Registration allows for easier monitoring.
4. Monitor STRs
Associations can use software or third-party services to identify any unregistered listings on online platforms. Frequent checks will help the HOA board enforce the policy consistently and ensure owners are not violating the rules.
5. Insurance Proof
For better protection, boards can require rental owners to provide proof of their rental insurance coverage. Standard homeowner policies typically don’t include damage or liability coverage for rentals, which requires a separate policy.
6. Renter Conduct Rules
Renters should adhere to the association’s rules, including noise restrictions, parking regulations, trash disposal guidelines, and rules governing the use of amenities. Homeowners must make sure their tenants understand these rules and ask them to sign an acknowledgement form.
7. Penalties for Violations
The rental policy should also clearly define any penalties for violations. State laws and governing documents permitting, this can include monetary fines, suspension of privileges, and even legal action. Associations must communicate these penalties clearly to homeowners and their renters.
8. Cap on Rentals
Many associations set a cap on the number of homes in the community that can operate as STRs simultaneously. This helps control the percentage or number of rentals, ensuring they never exceed the volume of full-time residents.
9. Occupancy Limits
The policy should include maximum occupancy rules to ensure compliance with building codes and fire safety regulations. Overcrowding is not only a safety hazard but can also cause noise, parking, and traffic problems.
10. Reporting and Complaint Procedures
Finally, the HOA should establish a formal system for residents to report violations. A clear process allows residents to submit complaints, document issues, and escalate unresolved problems with ease.
The Importance of Consistent Enforcement
Consistent enforcement is critical in HOA vs short term rentals disputes. Selective enforcement (or even the appearance of it) can invite legal troubles and destroy trust in the board. To ensure consistency, boards should document violations, apply penalties uniformly, and communicate clearly with everyone.
HOA vs Short Term Rentals: In the End
Associations often struggle to balance the rights of homeowners with the community’s best interests. When it comes to STRs, boards should always refer to their state laws and governing documents for guidance. Before imposing a rule, amending the CC&Rs, or applying a penalty, it’s best to consult a professional.
An HOA management company can help navigate short-term rental restrictions. Start looking for the best one in your area using HOA Explore!
