There’s a debate that just keeps raging, and that’s short-term rentals in HOAs. Airbnb, HomeAway, VRBO, Housetrip, Couchsurfing, and Roomerama all provide a service that provides a more ‘authentic’ vacation, and it’s cheaper than hotels. In this article, we’re going to focus on short-term vacation rentals in HOAs, and what your board can do to stop homeowners renting out their homes.

Short-term rentals

Airbnb is creating a stir all over the world, it’s completely changed the tourism industry, and it creates waves in the HOA community. According to Forbes, Airbnb is now worth $10 billion. It is a huge platform, that changed the vacation rental sector. It’s now not the only platform like it in the market, there are many others.

From a homeowner’s point of view, they’re great. They can rent out a room or your house and make money! However, for their neighbors, and for HOA management, it can be a nightmare!

Issues with short-term rentals in HOAs

People spending their vacation in the HOA don’t live there, they don’t care about maintaining HOA standards. They may make excessive noise, hog the barbecue, or have loud parties. Other issues are always extra cars filling up parking spaces, and general unwelcome noise. All of these things generate complaints and create more work for the HOA board. More seriously, they can put extra pressure on public services, such as the police, fire brigade, and emergency medical services. So what can your board do about it?

HOA restrictions on short-term rentals

First of all, many community association’s Rules and Regulations, and the Covenants Conditions, and Restrictions (CC&Rs) already restrict or prohibit short-term rentals in the HOA.

Short-term leases

Many CC&Rs prevent homeowners from leasing their property for less than 30 days. Short-term rentals can qualify as a lease because the host is being paid. But that does depend on the HOA’s definition of a lease. A lease can be the exclusive right of possession of a property, and short-term rentals do not fall into that category. However, if a lease is defined as the use of a unit, without the exclusive right of possession, then renting out homes on short-term rental platforms definitely does.

Business restrictions

Also, if the CC&Rs restrict homeowners from having a business or commercial activity in their house then short-term rentals could fall into this category. But normally businesses are allowed in the home so long as they’re not a nuisance (such as being detectable through noise, sight, or smell). Now, it could be argued that short-term rentals are a nuisance but you would have to have a nuisance guest before taking that line.

Adjust CC&Rs

Now, if your HOA does not currently have any rules in place to ban short-term rentals then you can change the CC&Rs. You’ll need the approval of the homeowners to do that, which may be an uphill battle. While some homeowners might be thrilled to get rid of short-term rentals, many residents will probably not be impressed by the HOA trying to take away their extra income. Especially if you live in a city that attracts a lot of tourists.

The best way to pass the changes is to work with an HOA attorney. While this may be expensive, it will be worth it to get the language right. You need to meet the expectations of the residents and the board and make sure that the new regulations are enforceable under state law. You may also have to protect yourselves from legal action by homeowners who bought the unit to be able to rent it out for short-term rentals.

Fines

Another scenario is that your HOA does have rules in place to stop residents from renting out their units short-term, but people keep breaking them. What can you do to stop it happening? A common strategy is to fine homeowners steeply. For instance, for the first infraction, they could be fined them $500 dollars, and every time they violate the rule you double the fine.

Now, some boards get nervous about fining a resident that much money. However, if you have a fine in place, even if it’s high, you need to enforce it equally, and consistently. It’s the only way to prevent resentment towards the board and maintain your HOA’s reputation. You can also work with an HOA attorney to enforce your rules on short-term rentals.

Wrapping up: Short-term rentals in HOAs

Short-term rentals in HOAs can become difficult for residents in the community, and boards can restrict them by adjusting CC&Rs. By having clear rules that the board can enforce through fines, you maintain order in the community association.

Read more about short-term rentals in our 2023 Florida attorney jamboree transcript.