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Issues with Short-Term Rentals in HOAs

As services like Airbnb and VRBO have exploded in popularity over the last five years or so, it has brought a brand-new set of issues for homeowners’ associations (HOAs) throughout the United States to consider. Here in Arizona, cities cannot enforce short-term rentals, so it then becomes up to the HOA to enforce them. Even then, the only time they can be enforced is if the CCRs contain the rental restriction.

Even beyond this, there are some questions HOAs must answer as to whether or not they should allow these types of short-term rentals at all. For example, giving out gate codes to renters in gated communities could be a security concern. It also becomes more likely that community quiet time rules will be violated by short-term renters, who typically come to areas to vacation and party.

Here are just a few examples of what other HOAs have done to address the issue of short-term rentals when working with HOA legal counsel in Arizona:

  • Implement a minimum rental term: We’ve seen HOAs develop rules addressing short-term rentals in their CCR by implementing minimum rental terms. There may, for example, be a minimum term of 30 days, which would help to avoid many of the week-long (or even shorter weekend) trips that tend to cause a majority of the problems associated with short-term renters in HOAs.
  • Establish a long-term only rule: Some other HOAs prefer to just avoid getting cute with their minimum rental term rules and just outlaw short-term rentals altogether. We’ve seen examples of HOA communities state in their CCR that rentals of units are prohibited unless they are for a term of at least one year. This essentially outlaws all short-term rentals and provides a consistent rule for HOA management to enforce.
  • Fines: Some HOAs use the imposition of fines in creative ways to discourage short-term rentals. They may allow short-term rentals, but implement heavy fines for violations of HOA rules. Otherwise, they might levy significant fines against homeowners if they allow short-term rentals when the HOA has a no short-term rental rule. One example is to implement a fine of 200 percent of the listed advertised rate when a homeowner is caught doing short-term rentals, this assumes the CCRs prohibit short-term rentals and the owner was given notice and an opportunity to be heard prior assessing the fine.
  • Registration: Some HOAs do allow their members to do short-term rentals, especially if those HOAs are located in very tourist-heavy areas. However, the homeowners in those HOAs may be required to register with the HOA as a rental home and pay the association a flat fee of $25 to complete a tenant registration sheet, which includes the names of the tenants, the lease dates, vehicle information and contact information of the tenants. The HOA then offers services such as temporary parking passes and temporary use permits for common areas. This can be a situation that ends up working well for both homeowners and HOAs, if HOA management is willing to take on the extra work.

For more information about what you and your HOA can do to address the increasingly prevalent issue of short-term rentals, contact an HOA legal counsel in Arizona at Goodman Law Group today for some helpful advice. We look forward to working with you soon.