Things are being changed around in the homeowners association industry now that we have services like Airbnb that offer short term rentals. With these types of platforms, it’s fairly easy for property owners to rent out their spaces to travelers who are looking for a place to stay for a short period of time. With that, HOA short term rentals have become common.
This can be a problem because, in associations, renting out a property like this is often a violation of the association rules. On the other hand, this is starting to be legalized in some jurisdictions, making the whole issue confusing and ambiguous. But either way, this means your condo association should start thinking about your stance on HOA short term rentals.
In this article:
- • Should Your HOA Allow HOA Short Term Rentals?
- • What Is Considered a Short Term Rental?
- • Why Do Associations Dislike HOA Short Term Rentals?
- • How Should Associations Handle HOA Short Term Rentals?
- • What to Expect When You Allow Short Term Rentals
- • HOA and Airbnb: From a Homeowner’s Perspective
- • HOA Short Term Rental: The Verdict
Should Your HOA Allow HOA Short Term Rentals?
The way that many people travel has changed drastically over the past decade. Thanks to the increase of technology and a desire for people to think out of the box when it comes to traveling, options have greatly increased. Short term rentals have become a popular way for travelers, whether on vacation or traveling for business, to stay comfortably without overextending their pocketbooks.
This has had a big impact on HOAs because it opens up a new set of questions and problems that were not there before. Many HOAs are ill-suited to the demands of short term rentals and have not been prepared for this influx of homeowners using their properties to earn extra cash. Here’s some information to help your board make these decisions regarding short term rentals in your HOA community.
What Is Considered a Short Term Rental?
Short term rental, also known as vacation rentals, is the renting out of a home, apartment, or condominium for a period shorter than a traditional lease. Short term rentals are especially popular in destination areas. Usually, the owners will rent out their property for the week, or sometimes even overnight stays.
Short term rentals have become especially popular over the past few years due to the popularity of companies, such as Airbnb. Although short term rentals are great for people wanting to vacation and avoid hotels, it has become a nightmare for homeowner associations.
Why Do Associations Dislike HOA Short Term Rentals?
The main problems HOAs have with short term rentals are with issues that may arise from renters. These short term rental problems can be anything from excessive noise, more traffic coming through the neighborhood, vandalism, and even small things such as leaving trash out on the street. Although these problems may not seem big, an HOA’s primary job is to keep their residents happy. And if someone is constantly renting out their home, these issues can build over time.
How Should Associations Handle HOA Short Term Rentals?
In most locations, HOA short term rentals are legal. This includes short term rentals in apartments, townhomes, and condominiums. This does not mean, however, that there is nothing an HOA can do about short term rentals. If you wish to ban HOA short term rentals — or at least minimize their occurrence — check out the tips below:
1. Check the Law
The board must first consider state and local laws that may determine whether rentals such as Airbnb, HomeAway, or FlipKey are allowed in HOAs. In most cases, local laws can help crack down on potential disturbances in HOA short term rentals.
Although there are no federal laws that ban HOA short term rentals, there are some ordinances that prohibit vacation rentals in certain city limits. Check local zoning codes. Sometimes, HOAs may be able to turn to local laws and zoning codes for support. Most residents must agree to abide by local laws, and in some cases, these zoning laws may prohibit hotel use in particular areas of a city.
2. Check Your Governing Documents
It is important to look at your governing documents to see if there are already HOA short term lease rules in place. Check short term leasing restriction language. If a community is located in a highly desirable vacation area, there may be a greater chance of potential violations.
It will be more tempting to violate restrictions for residents and more difficult to address privacy issues for the HOA. Consider loopholes in the existing language. For instance, if an owner is allowed to rent his home for a year but can also terminate that lease before it ends, there may be a legal loophole to allow an HOA short term rental.
If your governing documents are ambiguous, an HOA can amend them to ban short term rentals, as long as they coincide with the law.
3. Put Restrictions on HOA Short Term Rentals
If you decide to allow short term vacation rentals in HOA, there are certain restrictions that you can place upon them. Because short term rentals are so popular now, community associations may have more trouble securing a majority vote in instituting new restrictions.
However, if residents understand that some limitations can protect the entire community from extra service burdens or potential noise or damage, they may agree to restrict vacation rentals to a certain number per homeowner per year. They may also agree to prohibit the use of community amenities like the pool and clubhouse for renters.
Another reasonable restriction is to require residents to notify the board of each rental, complete with the renter’s information. You can also require the renter to identify themselves upon entering the property. It is also good to make sure that homeowners understand that they are responsible for any violations of the governing documents and any fines that may come with these violations.
Furthermore, an HOA may discourage short term vacation rentals by collecting monetary support that can mitigate some of the negative effects of short term rentals. Short term guests can be charged with extra fees that can cover community services such as parking and trash removal. Maximum occupancy limits can be enforced and violations can carry fines. Fees that pay for extra property or liability coverage can also be charged.
4. Set Guidelines for Prohibition
If your HOA decides to prohibit short term rentals altogether — provided it complies with local ordinances — consider the following guidelines:
- • Set a Standard. Before identifying violators, the HOA board must first decide on the number of days that constitutes a short term rental.
- • Notify Homeowners. The board has a responsibility to keep all homeowners up-to-date on new policies or policy changes. Once you decide to ban HOA short term rentals, notify homeowners of the details, including any fines they may incur in case of infractions.
- • Find Out When the Policy Is Being Broken. There are certain ways to monitor your properties to ensure that none of them are being used for this purpose. Your board can pay an HOA short term rental monitoring service to check the internet and notify you if any properties are listed on websites such as Airbnb.
- • Learn How to Handle Violators. Your HOA board must set policies for potential violators. Will you let them off with a warning on the first offense or immediately levy fines? If you do plan on imposing fines, set a standard, and learn to follow precedence. Don’t change the amount for different offenders.
What to Expect When You Allow Short Term Rentals
If your board decides to give the go signal on HOA short term rentals in your association, you’ll want to consider the main complaints from owners and how to handle them. For example, the main policy pieces for successful HOA short term rentals should cover:
- • The risks and liabilities to the association
- • How you’ll handle disruptive or noisy renters and how you’ll encourage owners to look for respectful renters
- • The maximum number of numbers you’ll allow a property to be rented
- • How much this will cost your association — and there will be a cost
Basically, you’ll want to look at the areas that are the biggest issues and work on fair, realistic rules for each.
HOA and Airbnb: From a Homeowner’s Perspective
The rise of online lodging marketplaces like Airbnb has led to a growth in property owners renting out their homes. It’s a convenient and affordable mode of stay for vacationers, while homeowners get a chance to earn extra money. In fact, investors and brokers believe it’s a lucrative business.
In response, many HOAs have put restrictions or entirely banned property owners from putting up their homes on Airbnb. Due to the promise of great profits, some homeowners have chosen to bypass the rules set forth by associations.
You must take note, however, that not all locations allow short term rentals. For instance, in New York City, it’s illegal to rent out your home for periods under 30 days. In Japan, under the Japanese Hotels and Inn Act, a person who wants to rent out their room or home must obtain a permit from the government.
In the same way, your association may set up policies when it comes to this kind of short term rental. As such, it’s best to check your HOA Airbnb rules (and local laws) before listing your home on the app.
HOA Short Term Rental: The Verdict
When it comes down it, whether or not you should allow HOA short term rentals in your community is a decision your board must make. All things considered, more problems will certainly arise from allowing them. However, you must also take into account how community members feel about the issue.
You can’t make everyone happy, so settle on a decision that would both satisfy most members without sacrificing the community’s well-being. After all, the HOA board’s decisions must always be in the community’s best interest. In the end, it’s a balancing act.
Some associations turn to HOA management companies for help with this kind of decision. If you feel you need the same, don’t hesitate to give us a call.