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JeanI (Louisiana)
Posts: 112
Posted:
Our Board is contemplating restricting short term rentals in the development. However our legal documents are silent as to restricting short term rentals. They propose to do this by Resolution rather than establishing new Restrictions because the process is long and complicated. In addition they want to impose "fines" for violation of the Restrictions despite the fact that the Restrictions specifically state that the remedy for violations is court action such as seeking an injunction, declaratory judgment or "otherwise" They are reading the language "or otherwise" as a remedy to institute fines. I would appreciate how other HOA's have dealt with both of these issues. Thank you. Jean
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Good luck on that. A lot of people would like to have that too. However, as I have been told by a lawyer in the past, unless the HOA owns that property they can't control what the owner does within but external.

It would be better and stronger if your city has laws about short term rentals. They could have more "teeth" to enforce. Plus your still going to have to have a majority approval for the changes. Are a majority of people in agreement or are they the ones who want to rent?

This does need to go by a lawyer. This time it may need a lawyer familiar with Real Estate laws. Any changes to the documents may need lawyer familiar with corporate ones.

Former HOA President
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By JeanI on 02/12/2023 6:00 AM
Our Board is contemplating restricting short term rentals in the development. However our legal documents are silent as to restricting short term rentals. They propose to do this by Resolution rather than establishing new Restrictions because the process is long and complicated.
What the Board wants to do is add a new use restriction, which of course would be a new covenant. Your suspicion is correct that the board cannot lawfully do this via a resolution. An amendment must be voted on by the owners, per the Declaration's instructions on how to amend.

Is this a condominium? Or a subdivision of single family homes? Or something else? Louisiana statutes may have more to say about fines, but I need to know whether this is a condominium.

Also what year was the declaration recorded?
SheliaH (Indiana)
Posts: 6,964
Posted:
This is something your board really needs to discuss with your association attorney. First, foba resident poll and see what they think of short term rentals and what the problems are. (e.g. strain on already limited parking). Have they been able to resolve issues with the renters and/or owner?

You may find you don't have much of a problem that would require an amendment to your documents- at least not now. As for resolutions, you might find it easier to prepare one stating the homeowner is responsible for the behavior of his/her household or tenants in complying with community rules, so violations will be the responsibility of the owner to correct or face the appropriate action by the association, up to and including legal action. That doesn't single out short term rentals, but puts everyone on notice that they need to educate tenants on the rules and respond promptly to complaints.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
TimB4 (Tennessee)
Posts: 21,059
Posted:
Typically, to win a legal challenge, any rental restrictions should be in the covenants.

See:

Homeowners' Association As Vacation Destination: Short-Term Rental Restrictions in HOAs Scroll down - lots of large ads on this site.

The Do's and Don'ts of HOA Rental Restrictions article by an attorney

Everything You Need to Know About HOA Rental Restrictions 2022 article by a management company

Short Term Rental Restrictions: The Power of Your Declaration and By-Laws by an attorney

Rental Restrictions in Virginia Condominiums Virginia specific but still good info

Hope this helps,

Tim
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Jean

It is very common that a BOD will try and establish rental restrictions via Resolution, Rules, etc. Bottom line is they cannot, and if legally challenged the BOD will lose.
JohnP47 (Washington)
Posts: 31
Posted:
I'm in WA state, and we are coping with a similar situation. Frequent rentals create added risks and hazards for the common areas which are within the association's purview. Things like use of elevators, carpets, mailboxes, intercoms, roads, violating rules, allowing access in emergencies or with proper notice, etc. There's a daily challenge short-term renters often fail, or don't care about, which might generate $650 fines against the association for improperly sorted solid wastes (recycling, food waste, and garbage). The burden of instructing renters and nudging them into following the rules falls on the association because the owners seem not to care. Getting real: that burden falls on me.

One issue got me very moved to delve in: if the owner/renters are running a business (which they are) what are their tax and registration identities? What minimum information do we need to know to show we confirmed they were legit?

The issue is, to my layperson's understanding, if the association has silently "permitted" an unreported/thus untaxed business on the premises does it become an "accessory to a crime" [An accessory is someone who aided or contributed to the commission or concealment of a crime. source: https://www.law.cornell.edu)? Well, what's the proper due diligence to prevent that? I can foresee that should something go to court our insurance company might NOT represent us because we didn't take steps to ensure all owners complied with the necessary laws.

The Association has rights to ask for information needed to remain legally compliant with the law. Using that, I'm considering writing rules to gather information with fees, and fines, and a collections process to "encourage" responses. [I know there are more details, so yes, it will go before the board and follow all rule changing steps the governing docs require like notice to the owners to solicit their comments, etc.)

MaxB4
Posts: 3,513
Posted:
Without amending the CCRs, your only option is to see if your local municipality allows STRs. If they don't, let them handle your enforcement.
ElleN (Idaho)
Posts: 4,420
Posted:
JohnP47,

If business xyz is being run out of a rental; the HOA knows about xyz; and your HOA's covenants prohibit business xyz; then the HOA has a duty to enforce the covenants.

The HOA is not responsible for enforcing any lot/home/unit use restriction that lies outside of its covenants. In fact, trying to enforce a restriction outside of the HOA's lawful purview could get the HOA in trouble.

I think what "due diligence" is to make sure the house or unit is being used only for what the covenants allow will vary. Probably the only thing that is important is that the same due diligence is applied to each home. If you have concerns about due diligence, I think you should take them to a competent HOA attorney.
LetA (Nevada)
Posts: 2,679
Posted:
STR's like airbnb are regulated in Clark county Nevada as well as in the city of Las Vegas and Henderson. Clark County restricts STR's from overlapping and saturated.

Hate to break it to you the camel is in the tent now. The only way to deal with any property violation is to deal with each and every violation as it occurs.
Hold these owners feet to the fire and don't let things go.

BTW what do your covenants say about rentals and their duration? For example our covenants say rentals must be a minimum of 6 months. The Laws on STR's here
allow HOA's to maintain their minimum rental restrictions.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Many people run their business from their homes. Most HOA's are simply wanting to limit things such as deliveries, cars parked there, noise, pollution, signs, visitors, etc., not stop a home business without any of the afore mentioned things.
LoriM15 (Florida)
Posts: 1,009
Posted:
We have a current issue with a "business" being run out of one of our condos (one-story attached with a garage). The owner started collecting donations of food and supplies after the hurricane in September. She advertised on Nextdoor and then started a gofundme. To date she has raised over $10,000 on gofundme and people are constantly dropping off donations. She has helped a lot of people and it's a great thing - except that we are a gated community and it's now four months past the hurricane and her charitable business just keeps getting bigger and bigger. Even non-profits are supposed to be registered in Florida (she is not) and she doesn't have an IRS 501c3 either.

Her neighbors have complained because she lets strangers in the unmanned gate or they just sit blocking the gate until someone else lets them in. This happens multiple times a day. She also let's people in remotely when she's not home. They wander around the block trying to figure out which house it is and have been found in a neighbor's garage and donations have been left at the wrong house.

On Saturdays, when they load up to take the donations out, she has many cars lined up on both sides of the street. This week there were 26 cars. It's a safety hazard because the streets are narrow and emergency equipment could not get by.

She has threatened to call the news media on us because she has been featured twice doing her good work (and it is good work and we all appreciate how hard she works). We had the condo president speak to her (she ignored), then we sent a nice email giving her until the end of the February to find an alternate location (she ignored) so we are asking for her plan to end the business at her home. She has ignored. We are sending her an official violation notice with a two-week warning this week.

Our documents say this about businesses (and we are confident that a court would define what she is doing as a non-profit business). She is violating several parts of this policy.

I also included our paragraph that prohibits short term rentals:

8.2.1 No trade or business of any kind may be conducted in or from a Parcel or any portion of the Condominium, except that the Owner or Occupant may conduct ancillary, “home-office” business activities within the Home so long as:
(a) The existence or operation of the business activity is not apparent or detectable by sight, sound, or smell from outside of the Home or Condominium Unit (including, but not limited to, signs identifying the business shall not be seen from outside the Home or Condominium Unit, the business use shall conform to all noise ordinances and all noise and nuisance requirements of this Master Declaration, if any);
(b) the business activity does not involve visitation of the dwelling by employees, clients, customers, suppliers or other business invitees in greater volume than would normally be expected for guest visitation to a residential dwelling without business activity;
(c) the business activity does not increase traffic in the Community in excess of what would normally be expected for residential dwellings in the Community without business activity (other than by a reasonable number of deliveries by couriers, express mail carriers, parcel delivery services and other such similar delivery services);
(d) the business activity and all parties related to the business activity comply with all vehicle and parking requirements and prohibitions set forth in this Master Declaration;
(e) the business activity is legal and conforms to all zoning requirements for the Community;
(f) the business activity does not require the Master Association to obtain additional insurance coverage, increase the insurance premium paid by the Master Association, or otherwise negatively affect the Master Association’s ability to obtain insurance coverage;
(g) the business activity is consistent with the residential character of the Community and does not constitute a nuisance or a hazardous or offensive use, or threaten the security or safety of other residents in the Community, as determined in Board of Director’s discretion; and
(h) the business activity does not result in a materially greater use of Common Areas, facilities or Master Association services. The terms “business” and “trade,” as used in this provision, shall have their ordinary, generally accepted meanings, and shall include, without limitation, any occupation, work, or activity undertaken on an ongoing basis which involves the provision of goods or services to persons other than the provider’s Family and for which the provider receives a fee, compensation, or other form of consideration, regardless of whether: (i) such activity is engaged in full or part-time; (ii) such activity is intended to or does generate a profit; or (iii) a license is required therefor.
8.2.2 The foregoing notwithstanding the use of a Parcel as a public lodging establishment, for Home Sharing, or for Fractional Ownership, or as part of any type of vacation club or program shall be deemed a business or commercial use that is prohibited.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I think people get confused between what it means to run a business in your HOA home. The term is "Put a shingle up" type businesses are what are frowned upon. we are talking someone using their home as a Dentist office or Car repair shop. Something that attracts cars/noise/strangers. Plus putting an actual sign up advertising. Those are clear violations of the rules and the intent of the rules.

However, it gets a bit more unclear when it comes to things like renting out the home or a room. The rules in place intent are to prevent anyone using their home for "Frat/Soritory" type housing. This was way before now us have "AirNB". Most people's HOA documents are extremely old before these type of companies took over popularity. Now it's crossing more of the line of a "business" than just renting.

There are also those who run MLM's, Crafts, or charities out of their homes. The difference with them is typically they don't attract the traffic and don't advertise. Most people don't have a problem if you sell Girl Scout cookies from your house.

The person who is running the charity out of their home. I would strike first if I was in your shoes. Why not point out the rules of your HOA is that this is not allowed? Make them move the business into an actual location out of their home. It's better for everyone if they did that anyways. They threaten to put you on the news threaten back by putting them on the news painting what they are doing is causing rule violations and complaints. It is a two way street after all or should be once they move their cars...

Former HOA President
KerryL1 (California)
Posts: 14,550
Posted:
I think you're doing the right thing, Lori. what matters is that her activities, no matter how noble, burden your common area streets and your residents' rights to privacy and peaceful enjoyment of their homes.

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