Short term rentals have become a hot-button issue in HOA communities. More and more homeowners are choosing to rent their homes through sites such as Airbnb or VRBO as a convenient, low-cost way to earn additional income; however, the popularity of short-term rentals is raising concerns in associations and even opening them up to liabilities.
The main problem with short term rentals in an HOA is that guests automatically have free reign within the HOA and no long-term interest in the community. They may not be aware of or understand that there are HOA rules – they might not even be aware the rental is a part of an association.
If they don’t know the rules, they unknowingly become in violation of the rules, which impacts neighbors, the homeowner, and the guests themselves, and can ultimately become a safety issue.
More often than not, guests don’t read the rules. Many homeowners will provide an information binder that includes the rules, but guests simply don’t read them, so they don’t know what they don’t know.
If guests – even unknowingly – break the rules, by the time the Board or management communicates with the homeowner that rules aren’t being followed, the guests are long gone and there’s a new guest in there, and the cycle continues.
There’s also a safety aspect to consider for permanent residents of the association.
For example, in gated communities, renters must be given the gate code while staying, but this becomes a security concern because typically the Board or management only changes the gate code every six to 12 months. This gives people who aren’t a part of the HOA access to the community for that entire amount of time instead of just the days they rented.
Another example is the quiet time rule. Think about when you go on vacation. You probably break from your normal routine, stay up later, and are more relaxed. You may find yourself outside with friends and family enjoying a nice evening of food and beverages, playing games, telling stories, laughing and joking loudly until evening turns into midnight.
What you didn’t know was that the HOA has a quiet time rule of no outside activities after 10 p.m. and now you’ve upset the neighbors, but there’s nothing anyone can do about it.
Short term rentals can also cause extra burdens in the HOA affecting:
- Use of common areas
So, what can an association do to deal with the issue of short term rentals?
The most obvious answer is to first check and see what the governing documents say about the issue. Short terms rentals are a relatively new occurrence in the world of HOAs, so if the governing documents are silent on this topic, the Board can put a rule into place. But before doing so, it’s highly recommended that the Board seek legal counsel first.
Here are some examples of what other HOAs have done:
- Long Term Rentals Only
In the CC&Rs, one HOA community states that rentals are prohibited unless they’re long term rentals. They’ve determined that the minimum amount of time that you can rent out your home is one year. It solves the issue of short terms rentals and gives the HOA management something to enforce if needed.
- Minimum Rental Term
Another HOA worked with their attorney to write rules that specifically address short term rentals. The rules state that you can rent out your home, but there is a minimum rental term of no less than 30 days. This helps avoid the weekend rentals that were causing a majority of the issues.
The HOA took it a step further and issues significant fines if the rule is violated. If a homeowner is listing their home on a short term rental site for an amount of time of less than 30 days, then they can be fined 200% of the listed advertised rate and the fine can go up to a maximum of 400% as determined by the board.
- Register with the HOA Office
Another HOA located in a popular year-round recreation area requires homeowners to pay the Association every time they rent out their home. The HOA then allows the owner to give out temporary parking passes and temporary use permits for the common areas such as tennis courts, rec areas, boat ramps, and other member-only areas. In this case it’s crucial that the homeowner follows the rules and informs HOA management when their home is being used as a short term rental.
- An Aggressive Approach
One HOA took a very strict policy of no short term rentals at all. If a homeowner wants to rent out their home it has to be for a minimum of a year and a copy of the lease must be given to the association.
Most governing documents say that homeowners are responsible for their guests, but if there’s an issue, anyone can end up suing anyone this day and age, and the association could end up being in a legal fight for something it shouldn’t have been. As the short term rental market continues to grow, it’s important for associations to be proactive by putting policies in place.