Short-term rentals, which have become popular on platforms like Airbnb and Vrbo, are a prevalent feature in residential communities. This can be great for homeowners looking to generate extra income and offer flexible options for travelers, but short-term rentals can present challenges in homeowners’ association (HOA) communities.
Generally, renting out properties in the short term is a violation of the HOA rules. However, some jurisdictions are adjusting the rules to allow short-term rentals, making the situation murkier and creating issues with community standards, safety, and harmony.
Understanding the Impact of Short-Term Rentals
Short-term rentals can have both positive and negative effects on HOA communities. On the positive side, they can boost the local economy and increase property values by introducing more travelers to the area, especially those looking for stays outside of the conventional hotel or motel.
On the flip side, short-term rentals can create parking issues, increased noise disturbances, security concerns, and wear and tear on shared amenities like parks or golf courses. In addition, frequent turnover of renters can disrupt the sense of community that many residents seek with an HOA, leading to disputes and conflict.
Set Clear and Enforceable Policies
Whether you want to allow short-term rentals in your HOA community or prohibit them, it’s crucial to establish clear, comprehensive, and enforceable policies. These policies should balance the rights of homeowners to list their property for rent with the HOA’s responsibility to protect the larger interests of the community.
Evaluate the Local Laws
You have to consider the state and local laws that may affect short-term rentals through HomeAway, Airbnb, or similar platforms in an HOA community. Local laws may help crack down on disturbances caused by short-term rentals.
There are no federal laws that ban HOA short-term vacation rentals, but there are ordinances that prohibit short-term rentals within certain city limits. Check the local zoning codes to see if you have support. Most residents of the community agree to abide by local laws, and zoning laws may prohibit vacation rentals in the area.
Review Governing Documents
Begin by reviewing your governing documents, such as Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and rules and regulations. This helps you determine existing provisions regarding rentals. In desirable vacation areas, there’s more likely to be possible violations.
Consider loopholes like a rule that states owners are allowed to rent a property for 6 months, but they have the option to terminate the lease before it ends. This is an example of a legal loophole that could support a short-term rental in an HOA.
If the documents list nothing for short-term rentals, you may need to amend them according to the proper procedures and obtain the required homeowner votes. Keep in mind that your amendment will have to coincide with the local laws.
Define “Short-Term Rental”
Ambiguous language can create problems in an HOA. Make sure you clearly define what constitutes a short-term rental. Typically, this refers to a rental that lasts less than 30 consecutive days. Clearly defining a short-term rental eliminates any ambiguity that limits enforcement.
Once you define the short-term rental, notify homeowners of the new policies or policy changes. They should know the policy and any fines or penalties they may incur if there’s a violation. If you do plan on imposing fines, set a standard and learn to follow precedence. Be consistent.
Set Reasonable Restrictions
Any restrictions you set should be reasonable, fair, and tailored to address specific community concerns. For example, common restrictions include limiting the number of short-term rentals in the community, establishing minimum rental periods, and restricting rentals during certain times of the year.
Address the Needs of the Community
If you decide to allow short-term rentals in your HOA, it’s important to consider the complaints you’ll hear from property owners and have a plan in place to handle them. For example, your policy should cover:
- Risks and liabilities for the association
- Procedures for disruptive or noisy renters or other complaints
- Expectations for owners seeking renters
- Registration process for short-term rental guests
- An outline of how much it will cost the association
Safety and security are top priorities for HOA communities. Ultimately, homeowners renting their properties are responsible for their renters’ compliance with the HOA rules. A “welcome packet” that outlines community rules, parking guidelines, and HOA contact information can help ensure renters understand the expectations during their stay.
Should You Allow Short-Term Rentals?
The decision to allow HOA short-term rentals in your community is your own. Problems can arise when you allow short-term rentals, but your community residents have rights and may wish to offer their home for vacation rental — especially in a desirable vacation area. Consider the option that would satisfy the most residents and ensure that you have clear, enforceable policies and expectations to reduce disputes and promote harmony.
Author Bio Below:
Michael Bollinger, a Lexington, Kentucky-based entrepreneur, has left a lasting mark on the tech and software landscape. As the founder of LegFi and File990, Michael launched PayHOA.com in 2018 after Togetherwork acquired his first two ventures.
PayHOA is an affordable community management software for homeowner associations that streamlines payments, communication, and vendor management. Beyond his entrepreneurial pursuits, Michael finds fulfillment as a devoted husband and a loving father to his three children.
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