Homeowners associations (HOAs) help preserve local property values. They establish maintenance standards and limit the way that owners use their properties. For example, HOAs frequently prohibit the placement of garden vegetables in front yards or do not allow property owners to keep non-running vehicles in visible locations.
Another common restriction that HOAs implement involves prohibitions on short-term rentals. Can the community take action if an investor buys a property and starts renting it out on a daily or weekly basis?
HOAs can prohibit short-term rentals
The by-laws adopted by HOAs often include restrictions on the commercial use of residential properties. It is common practice for HOAs to establish rules that impose a minimum lease duration for those renting properties to residents.
Requiring leases that are no less than 30 days long is one way to prevent short-term rental practices from harming the characteristics of a community and the value of local properties. A new rule requiring registration with the state can help HOAs determine if any local property owners engage in short-term rental arrangements.
It is possible that the HOA already has a rule in place that the community can enforce. If there is no pre-existing rule, then there may need to be public meetings held. Those meetings could result in a vote to establish such rules. Especially in scenarios where local property owners turned landlords intend to allow short-term rentals, such as rentals by the day, their actions could have a negative impact on other community members.
Reviewing existing by-laws, exploring enforcement actions and adopting new rules to protect the community can all help prevent investors keen on making a profit through short-term rentals from damaging the local community. HOA board members can benefit from legal guidance in responding to questionable investment and short-term rental practices.