Despite a year that has drastically curtailed traveling due to the global COVID-19 pandemic, the popularity of online vacation and short-term rental platforms, such as
These online platforms have popularized income-generation from short-term rentals for some property owners. This includes owners whose properties are located within community associations. Short-term vacation rentals create a host of issues for community associations and for neighboring owners-issues that may be exacerbated by the COVID-19 pandemic. Short-term guests are likely unfamiliar with association rules and regulations, or may simply not care. This may result in nuisance behaviors, such as excessive noise, unauthorized parking, or improper trash disposal. Short-term guests also are not impacted by the long-term effects of the wear and tear of common facilities and therefore may disregard proper use of the facilities, or worse, cause damage to the property. Moreover, guests unapproved by the association always have the possibility of being a security risk to the community. Some of these issues are exacerbated by the COVID-19 pandemic as associations seek to protect their residents with additional rules aimed at curbing the spread of the virus within the community. For example, a short-term renter may unwittingly attempt to use the pool or gym despite a rule prohibiting all guests.
All types of community associations face issues with short-term rentals. However, they may be much more visible in condominium associations where a unit is bound on other sides to other units, as opposed to single-family lots in homeowners' associations. Part of the difficulty association boards face with short-term rentals is enforcement of existing regulations and/or COVID-19 specific rules. A weekend-renter who hosts a noisy gathering on Saturday night may be gone the next day. A family who foregoes wearing masks when walking around the common areas may have already caused harm by the time the owner is contacted regarding the violation.
In addressing short-term rentals, community associations should first look to their governing documents. A provision defining short-term rentals and restricting such use of the property would prove most effective. Because the short-term rental boom is still a relatively new issue, many association documents will not contain such a provision. If so, an association should seek to amend its governing documents. While not always easy to accomplish, this is generally the most effective way to deal with short term rental issues.
Condominium associations face an added challenge even if they successfully amend their documents. In 2004, the
Other restrictions that are more commonly found in association documents may also be useful in restricting an owner's ability to set up short-term rentals. Some common restrictions found in association governing documents specify a minimum term of a lease, such as six months or a year, or specify the number of times a property may be rented per year.
Many associations have sought to utilize the "residential use" restriction contained in their governing documents to restrict short-term rentals. Such an endeavor would first require a close examination of this provision. For example, the governing documents may mandate residential use, or in other cases, may prohibit commercial uses of a unit. Any interpretation, and thus application to a short-term rental, would turn directly on the express language of the provision. These provisions have been extensively litigated in courts across the country. This is so because defining the bounds of activities that constitute residential use or commercial use is not a bright line. Moreover, certain activities of short-term renters may be consistent with residential usage of the property, while the owner is generating income from the use. Nevertheless, courts have generally been reluctant to apply a residential use provision as a restriction on short-term rentals.
Most significant to
Of note are two 2020 cases from jurisdictions outside of
Outside of the governing document provisions, an association has several other steps it can take to address short-term rentals.
- An association should document violations as they arise and send the appropriate violation letters to the owners. Although the quick departure of a short-term renter may dampen the efforts of the association to resolve an issue regarding that particular guest, a thorough record of violations against the particular owner is vital to an association's enforcement efforts.
- Going directly to the source by contacting the online platform may be an option in some instances. For example, the
Airbnb Terms of Agreement makes hosts responsible for complying with laws, rules, regulations and contracts with third parties, specifically listing homeowner and condominium association rules that may restrict subletting, short-term rentals, and even longer-term stays. - An association may have to resort to legal action against owners who repeatedly violate their association's governing documents.
Short-term vacation and rental websites, such as
Now is the time to take proactive action to arm your association with the tools required to deal with these types of problems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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