Vague language in Bylaws

DebbieF6 (North Carolina)
Posts: 13

Posted:

Bylaws were drafted when community established in 2003. An issue has come up with a resident renting out lower floor of house via Airbnb. Language in the covenants reads "The leasing of a residential home on any Lot shall not be considered a business or trade within the meaning of these Restrictions." The aforementioned restrictions pertain to home businesses which are allowed. Some residents think the term "leasing" is for 6 months or longer. Majority of us board members feel language is too vague and we are waiting for our HOA attorney to clarify. We had hoped to contact the attorney who drafted the bylaws, but sadly, she passed away last year.

Definitely a hot topic issue. If we have to amend the covenants to disallow short term rentals, we don't think we will get the needed votes as there are more lot owners who want to sell vs residents. If we have to allow these rentals, I guess we could ask our attorney if lessor could be charged a fee? We are a small, gated community and there will be more wear and tear on our gate, roads, etc.

Anyone have a similar experience?

Thanks!

MichaelT21 (Arkansas)
Posts: 501

Posted:

One option is you can talk with your city to see if the AirBnB use is allowed per the zoning terms. In our city it was not, so we didn't have to worry about it from a CC&R perspective.

I really can't predict what your HOA attorney will come back with. I don't consider AirBNB to be a business, and thus, my opinion is that business restrictions in CC&Rs do not apply to AirBNB use of property. Others will disagree. I don't believe there is solid case law one way or another on this issue.

DebbieF6 (North Carolina)
Posts: 13

Posted:

Thanks Michael. Our town does allow Airbnb use. Wish it could be that easy!

LetA (Nevada)
Posts: 2,679

Posted:

Does your governing documents say anything about any rentals must be a minimum of X duration? If your governing documents already state a minimum time for rentals, there is no reason
to amend your governing documents to address STR's like Airbnb.

BillD16 (Texas)
Posts: 971

Posted:

> we don't think we will get the needed votes as there are more lot
> owners who want to sell vs residents

I'm missing something, maybe? You are looking to restrict Short Term/AirBNB rentals, even though the majority of residents are in favor of Short Term/AirBNB rentals?

If wear and tear and maintenance costs go up, can't you just raise the dues to cover?

Reading between the lines, is there concern that once Short Term/AirBNB comes in, the neighborhood goes to hell? Is there reason to believe this is true? (I don't know and I'm genuinely asking)

BillD

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

DebbieF6 (North Carolina)
Posts: 13

Posted:

Yes, all but one of the residents want to restrict short term rentals. There is no language in our bylaws regarding leasing except what I pointed out in my post. If the board wants to disallow these short term rentals then we would need to ament the covenants. We don't think we will get the required 67 1/2 percent of needed votes to do this. We certainly don't want to have to raise dues to allow for wear and tear due to short term renters-how fair is that to the residents who don't rent out their houses?

In short, only 1 resident is now using Airbnb. More could follow and this quiet community may not be as serene as it is now.

KerryL1 (California)
Posts: 14,550

Posted:

Usually Bylaws and covenants (aka CC&Rs, declaration, deed restrictions) are two different documents. Can you distinguish them for us, Debbie?

I don't understand this phrase: "there are more lot owners who want to sell vs residents." Please reword.

SheliaH (Indiana)
Posts: 6,964

Posted:

I think this means most of the homeowners want to sell to another owner-occupant, or at least get a good price for their homes, which may not happen if the neighborhood is filled with rentals, whether short or long term.

As usual, most bylaws and CCRs have boilerplate language that don't keep up with the times or the unique features of the residents, who may have all changed since 2003 and have different attitudes about a lot of stuff. This is why it's a good idea to review the documents every 7-10 years or so to see what still works, needs to be tweaked, added or dropped altogether.

These days, between the investor owners who buy up the neighborhood and yap ab out renting the American dream (that's what one said during a 60 Minutes episode on the subject), the AirBnbs, Vrbow (not sure of the spelling) and everything else, I think most, if not all HOAs (or CICs, sorry Steve) should consider amending their documents to address renting. what that looks like will be up to the homeowners and then it may change again within the next 10 years.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

DebbieF6 (North Carolina)
Posts: 13

Posted:

You are absolutely right Sheila. Previous boards just kicked the can down the road so now it is up to us to do something. What I meant by saying we don't think the majority of owners will want to restrict any form of leasing/renting, is that these owners who are looking to sell their lot want to be able to market to anyone and everyone. They want to be able to allow short term rentals as they think restricting that will decrease the buyers pool.

DebbieF6 (North Carolina)
Posts: 13

Posted:

You are absolutely right Sheila. Previous boards just kicked the can down the road so now it is up to us to do something. What I meant by saying we don't think the majority of owners will want to restrict any form of leasing/renting, is that these owners who are looking to sell their lot want to be able to market to anyone and everyone. They want to be able to allow short term rentals as they think restricting that will decrease the buyers pool.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By SheliaH on 06/24/2022 11:01 AM
I think this means most of the homeowners want to sell to another owner-occupant, or at least get a good price for their homes, which may not happen if the neighborhood is filled with rentals, whether short or long term.

As usual, most bylaws and CCRs have boilerplate language that don't keep up with the times or the unique features of the residents, who may have all changed since 2003 and have different attitudes about a lot of stuff. This is why it's a good idea to review the documents every 7-10 years or so to see what still works, needs to be tweaked, added or dropped altogether.

These days, between the investor owners who buy up the neighborhood and yap ab out renting the American dream (that's what one said during a 60 Minutes episode on the subject), the AirBnbs, Vrbow (not sure of the spelling) and everything else, I think most, if not all HOAs (or CICs, sorry Steve) should consider amending their documents to address renting. what that looks like will be up to the homeowners and then it may change again within the next 10 years.

I get the feeling investors are not buying up homes in communities right now, even in HOAs. Home prices are too high for investors rate of return on investment.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

LetA it is the EXACT opposite of what is going on. Investors are taking over the market at such rates that new potential owners are being forced to rent than to own. Investors are buying cheap, fixing up, and then renting the property out. Which is increasing the rate of rentals. Investors are paying top dollars and then charging top dollar rent.

We now have subdivisions being built that are exclusive to ONLY renting. There is no homeownership. Plus the developers are hiring management companies running them as HOA's. Just they are the owner not any of the members.

The new generation are now not able to afford or purchase a "fixer upper" to live in. It's now becoming a rent controlled housing.

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By LetA on 06/24/2022 2:38 PM

Posted By SheliaH on 06/24/2022 11:01 AM
I think this means most of the homeowners want to sell to another owner-occupant, or at least get a good price for their homes, which may not happen if the neighborhood is filled with rentals, whether short or long term.

As usual, most bylaws and CCRs have boilerplate language that don't keep up with the times or the unique features of the residents, who may have all changed since 2003 and have different attitudes about a lot of stuff. This is why it's a good idea to review the documents every 7-10 years or so to see what still works, needs to be tweaked, added or dropped altogether.

These days, between the investor owners who buy up the neighborhood and yap ab out renting the American dream (that's what one said during a 60 Minutes episode on the subject), the AirBnbs, Vrbow (not sure of the spelling) and everything else, I think most, if not all HOAs (or CICs, sorry Steve) should consider amending their documents to address renting. what that looks like will be up to the homeowners and then it may change again within the next 10 years.

I get the feeling investors are not buying up homes in communities right now, even in HOAs. Home prices are too high for investors rate of return on investment.

Go on Youtube and look for that 60 minutes episode I mentioned. There was also a great article in the Washington Post about this (there may be a paywall to access it). Oh, if you go to the ProPublica website, it did a story on the subject as well - they specialize in investigative reporting (something few newspapers do these days) so the information is quite thorough.

ook at all that and then get back to me on investor-owners. With so many HOAs having ancient documents, it's very easy to go in and buy up a bunch of houses, especially when they say things like "you don't have to do any repairs, we'll take care of all the closing costs," blah, blah, blah.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MichaelS56 (Minnesota)
Posts: 859

Posted:

In our governing documents, an owner cannot rent, sub lease, or do AirBnB. WE have added that owners now need to have as their Unit their primary place of residence and must be there for two years before they can lease their Unit for at least 6 months.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So they can't but what is the punishment if they do?

Former HOA President