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Can an HOA community protect against short-term rentals?

On Behalf of | May 9, 2023 | Homeowners' Associations

A homeowners association (HOA) must establish a delicate balance between maintaining community standards and maintaining a sense of community. Consistent and reasonable enforcement of the rules is necessary, as is the frequent updating and modernization of existing HOA rules for both the board and property owners.

In the last decade, a new sort of rental arrangement has begun to put strain on communities and real estate markets around the country. Short-term rentals, such as those facilitated by apps like Airbnb, are a seemingly convenient and more offbeat way of arranging lodging while traveling. However, many communities have chosen to implement rules about short-term rentals for a host of reasons.

Community rules can lawfully limit economic activity

Minimizing the blurring between residential and business spaces is often a priority for HOAs. They want residential neighborhoods to retain their character and appeal, which typically means not having a lot of tourists or college partiers coming in and out of the neighborhood.

Limiting short-term rentals by requiring a minimum lease duration is a common rule implemented by HOAs concerned that property owners might begin leasing their homes out for single nights or weekends. Although HOAs generally do not have the power to completely prohibit renting a property that one owns, they can put certain restrictions in place to limit those rental arrangements so that they aren’t problematic for the equality of life in the community or the local property values.

Enforcing rules is as important as establishing them

An HOA will need to monitor for signs that someone intends to break or work around a short-term lease restriction to the detriment of the whole community. When an HOA fails to consistently enforce its rules against all property owners, those that do eventually face enforcement might try to claim that inconsistent enforcement might be indicative of discrimination.

Therefore, it is typically in the best interests of an HOA to be consistent about rule enforcement and to only put in place rules that the board intends to enforce. Seeking legal guidance and curtailing short-term rentals to prevent dangerous parties and fluctuating home values may be a smart move for an HOA concerned about the possibility of property owners putting profit above community standards.