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AirBnB’s – Enforcement now?

Started by PatJ1 • 18 replies • 443 views

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PatJ1 (North Carolina)
Posts: 568
Posted:
We have 2 AirBnB’s in our community that have been operating for quite some time. I was reviewing our CCR’s to comment on the plumbing issue subject posted and happened upon a section that does not allow them. As many times as I’ve reviewed our CCR’s, I can’t believe I missed it.

It says: no Unit Owner shall lease his Unit for transient, hotel or commercial purposes.

Before going to our attorney for guidance, has anyone enforced a CCR like this that has been overlooked for a few years? How can we enforce it now?

CathyA3 (Ohio)
Posts: 6,299
Posted:
Do your CC&Rs contain a statement something like "failure to enforce any provisions contained this document does not preclude future enforcement"? If so, you're in luck. Otherwise check state law.

It's so common for HOAs/COAs to have boards with different ideas about how strictly to enforce - or ones that neglect to do it at all - that there has to be some lawful mechanism to get back on track. Otherwise why even pretend that enforcement is a thing?
PatJ1 (North Carolina)
Posts: 568
Posted:
This is why I love this forum. Cathy's reply about "failure to enforce" had me dig further and I found the below. It addresses future conditions.

C.The failure of the Association or any Unit Owner to enforce any right, provision, covenant or condition which may be granted by this Declaration or the other above-mentioned documents shall not constitute a waiver of the right of the Association or of the Unit Owner to enforce such right, provision, covenant or condition in the future.

Guess we'll need a legal interpretation of the next section:

D.All rights, remedies and privileges granted to the Association or the Owner or Owners of a Condominium Unit pursuant to any terms, provisions, covenants or conditions of this Declaration or other above-mentioned documents, shall be cumulative, and the exercise of any one or more shall not constitute an election of remedies, nor shall it preclude the party thus exercising the same from exercising such other and additional rights, remedies or privileges as may be available to such party at law or in equity.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Just make sure that you enforce equally and at the same time (don't focus on one vs. the other).

Additionally, think about the unintended consequences of enforcement.

Are they being rented to make ends meet (potential loss of income could mean delayed assessment payments)?
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By PatJ1 on 12/23/2021 5:06 AM
... snip ...

Guess we'll need a legal interpretation of the next section:

D.All rights, remedies and privileges granted to the Association or the Owner or Owners of a Condominium Unit pursuant to any terms, provisions, covenants or conditions of this Declaration or other above-mentioned documents, shall be cumulative, and the exercise of any one or more shall not constitute an election of remedies, nor shall it preclude the party thus exercising the same from exercising such other and additional rights, remedies or privileges as may be available to such party at law or in equity.

I love legalese...

I *think* what it's saying is that enforcing one provision does not prevent you from enforcing others (eg., a person may be dinged for multiple violations if they're guilty of, for instance, parking violations and not cleaning up after their dog) and/or that imposing one penalty for a violation does not prevent you from imposing others (eg. a person who trashes the clubhouse may be fined and may be prevented from using the facility in the future).

But I'm not a lawyer, and hopefully yours won't charge an arm and a leg to translate that sentence into plain English.
SheliaH (Indiana)
Posts: 6,964
Posted:
Good point, but unless this community is in some sort of vacation area where there are dozens of vacation homes, I personally would be a little skeptical of that argument. But you need to rent out the home to help pay for the assessment and upkeep, why do short term rentals? It would make more sense to have a long term tenant so you're less dependent on leisure income. Especially now, since we have yet another COVID variant that could depress that industry again (at least for a little while).

If the homeowner didn't go to the board and explain the situation, then request a wae, I'd be even more vary.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CathyA3 (Ohio)
Posts: 6,299
Posted:
Related item: my CC&Rs also contain a statement saying that if one provision is found to be legally unenforceable, this does not make the rest of the provisions unenforceable. That's a smart thing to include - state or other law can change in the future, making a particular item no longer enforceable, and this verbiage protects the association in such a case.
CathyA3 (Ohio)
Posts: 6,299
Posted:
There is nothing to stop the airbnb folks from converting to a normal rental if they need the money - many rental restrictions allow rentals with a minimum length of six months or a year but prohibit hotel or corporate rentals.

So if anyone tried to claim that they couldn't pay their assessments if you stop their airbnb gig, I would be very skeptical.
PatJ1 (North Carolina)
Posts: 568
Posted:
We are not a vacation area and both units became AirBnB's immediately after purchase. In addition, our city in NC is rewriting all their ordinances. It's 630 pages long and includes restrictions for AirBnB's citywide. Won't be finalized or voted on until July, 2022. Doesn't really affect us if our CCR's say no AirBnB's, but one owner looking to turn his rental into an AirBnB was asking what was involved in changing our CCR's. I told him $7,000-$10,000 and a vote from 75% of the owners. New ordinance would require that they be 400 ft. apart. All 3 would be within 400 ft. So I don't really see a need in pushing the review and re-write. After 6 years I'm taking a break as Pres. Let someone else, him, he's staying, deal with it.

Clearly he would be in violation. Now to just figure out what to do with the exisiting 2.
KerryL1 (California)
Posts: 14,550
Posted:
I agree with Cathy's interpretation of Pat's CC&Rs. Our HOA, too, has a section that states just because a covenenat has been ignored doesn't mean the violation is a precedent.

Our CC&Rs, too, Pat, say our condos can't be used for "transient purposes." Our attorney defined that for us as less than 30 days, which some nearby cites use as a minimum term. Since you have the covenant, if your board wants to enforce it may rules about it, i.e, 30 days minimum term decide on a fining schedule and invite them to stop violating your CC&Rs. Then follow due process indoor & NC docs.
LetA (Nevada)
Posts: 2,679
Posted:
Quote:
Posted By PatJ1 on 12/23/2021 1:43 AM
We have 2 AirBnB’s in our community that have been operating for quite some time. I was reviewing our CCR’s to comment on the plumbing issue subject posted and happened upon a section that does not allow them. As many times as I’ve reviewed our CCR’s, I can’t believe I missed it.

It says: no Unit Owner shall lease his Unit for transient, hotel or commercial purposes.

Before going to our attorney for guidance, has anyone enforced a CCR like this that has been overlooked for a few years? How can we enforce it now?


What does your local laws say about STR"s If STR's are permitted in your local jurisdiction, those laws and ordinances make your CC&R's moot.
However, if your local ordnances are silent on the issue, you can always contact ABB with the property listings and report them as in violation of HOA covenants and ABB will delist the property.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By LetA on 12/23/2021 9:53 AM

What does your local laws say about STR"s If STR's are permitted in your local jurisdiction, those laws and ordinances make your CC&R's moot.
?

I think COAs/HOAs can impose restrictions that are greater than City ordinances. A COA's prohibition on STRs, vs. a city saying STRs are allowed, is such a restriction, so I say the COA gets to keep its prohibition on STRS.

Flip this (with the city prohibiting STRs and the COA allowing them), and I say the COA loses.
CathyA3 (Ohio)
Posts: 6,299
Posted:
COAs/HOAs regularly restrict things that are permitted by local statutes - eg. parking restrictions on association-owned streets, limitations on the numbers of types of pets or requiring leashes on common elements even though the city says nothing about it. Maybe a better example would be that COAs can forbid commercial use on their properties but cities certainly allow businesses in areas that are zoned properly.

So I expect that the COA could forbid hotel-stye housing even though the city is OK with it - although it may depend on the exact wording of the local law and how much people push back (eg. "we will not prosecute" vs. "you must allow this").
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Pat

It seems your BOD needs to grow a pair and go after offenders.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By PatJ1 on 12/23/2021 1:43 AM
Before going to our attorney for guidance, has anyone enforced a CCR like this that has been overlooked for a few years? How can we enforce it now?
A little observation pertaining to a few years having gone by since the covenant was enforced:

When a court deems a covenant is "abandoned," and so no longer enforceable, by my reading one of the main thresholds for such a ruling is whether it is obvious to people driving around the neighborhood that the covenant is abandoned.

In this instance, I doubt there's anything obvious indicating that certain units are STRs.

I say bust the airbnbers. The accused can always appeal and give their puny reasons for the airbnb. "I need the money, lots of it" is not good enough.
LetA (Nevada)
Posts: 2,679
Posted:
Quote:
Posted By AugustinD on 12/23/2021 1:21 PM
Posted By LetA on 12/23/2021 9:53 AM

What does your local laws say about STR"s If STR's are permitted in your local jurisdiction, those laws and ordinances make your CC&R's moot.
?

I think COAs/HOAs can impose restrictions that are greater than City ordinances. A COA's prohibition on STRs, vs. a city saying STRs are allowed, is such a restriction, so I say the COA gets to keep its prohibition on STRS.

Flip this (with the city prohibiting STRs and the COA allowing them), and I say the COA loses.

What if in the HOA'S CC&R'S Is a clause that states "This HOA will abide by all State, Local and Federal laws" seems like a revolving door.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By LetA on 12/23/2021 3:00 PM
What if in the HOA'S CC&R'S Is a clause that states "This HOA will abide by all State, Local and Federal laws" seems like a revolving door.
I do not think hypotheticals are helpful here.

Surely you have seen the repeated example of a city ordinance that requires four foot minimum fences. Can a HOA covenant in this city lawfully restrict fences to a minimum of five feet? Yes. Why? Because the HOA covenant does not conflict with the city ordinance.

Else see CathyA3's examples.
PatJ1 (North Carolina)
Posts: 568
Posted:
Currently our city does not have a STR ordinance. That is all about to change.

https://charlotteudo.org/

is currently under Phase 1 review with Phase 4 being voted on by City Council in July, 2022. It contains very specific ordinances regarding STR's. If it's passed as written, it will limit about 5 STR's in our 144 unit community as they would have to be 400 ft. apart. The way I understand it that if the passed UDO says 400 ft. the HOA can't permit them at less than that, but if the CCR's allows them, the HOA could make them 1000 ft. apart. Am I understanding this correctly?

Our CCR's are clear that STR's are not permitted and the known 2 need to go. Most owner's don't even know they are here.

We are loosing 2 of 3 board members in March without appointments or a quorum for elections in site. Would like to get this taken care of before the 2 of us step down. The remaining board member wants to add a STR making it 3. We may not have time to work through the violation process before March, but we can try. Can't hold a hearing without a board quorum.

Will check this out, "However, if your local ordnances are silent on the issue, you can always contact ABB with the property listings and report them as in violation of HOA covenants and ABB will delist the property." It may quicken things up. Has anyone done this?

AugustinD
Posts: 3,698
Posted:
Quote:
Posted By PatJ1 on 12/23/2021 4:35 PM
Currently our city does not have a STR ordinance. That is all about to change.

https://charlotteudo.org/

is currently under Phase 1 review with Phase 4 being voted on by City Council in July, 2022. It contains very specific ordinances regarding STR's. If it's passed as written, it will limit about 5 STR's in our 144 unit community as they would have to be 400 ft. apart. The way I understand it that if the passed UDO says 400 ft. the HOA can't permit them at less than that, but if the CCR's allows them, the HOA could make them 1000 ft. apart. Am I understanding this correctly?
I am assuming you are speaking of a hypothetical HOA that currently allows STRs but has certain rules that must be followed.

Generally speaking, the HOA can make a rule that is more restrictive. Requiring a minimum of 1000 feet between STRs is more restrictive than the city's proposed 400 feet. Hence the 1000 feet minimum would be lawful to the extent that it does not violate the city's proposed 400 feet minimum rule.

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