Short-term rentals are a great and necessary resource for renters, but they have a negative reputation for attracting people without ties to the community. HB 2672 provides new short-term rental laws in Arizona, which aim to reduce any negative impact from short-term rentals by regulating registration and potential zoning or criminal violations. While the associations don’t have more regulatory power, they are now allowed to report more issues to the controlling municipality or the Arizona Department of Revenue. Your homeowners association attorney in Arizona can tell you more!
Before a property is ever rented out on a short-term basis, the property owner or their representative must provide their contact information to the controlling municipality (that is, the city or town in which the property is located). This allows the city or state to contact the owner in order to respond to complaints. It can be done over the phone, via email or in person, but don’t expect the city to remind you—HB 2672 makes it clear that the owner is obligated to register their contact information, but if the controlling municipality doesn’t send a reminder, the owner will not be off the hook.
Potential Violations (Old and New)
The government’s previous authority to regulate short-term rentals for zoning, health and safety, criminal or adult-oriented violations still exists. Zoning ordinances protect the public from having certain types of businesses in their residential neighborhoods. Health and safety violations include sanitation concerns, fire hazards, building codes, traffic and other quality-of-living issues. Finally, adult-oriented concerns can be such issues as living near registered sex offenders, brothels, adult entertainment venues, liquor control, selling illegal drugs and more.
The new version of HB 2672 gives the government more power to regulate. This version makes failing to register your owner contact information with the city or town a violation, subject to penalties. It also makes it a violation to use short-term residential rentals for non-residential use, including using them as event spaces or restaurants and retail.
Penalties and Appeals
The penalties for violating HB 2672 are mostly monetary in nature. A first offense nets a $500 fine if the controlling municipality does not levy their own fine. If they do, the additional fine will be the difference between the city’s fine and $500.
Second offenses see that fine (or the difference between it and the controlling municipality’s fine) double to $1,000. Third offenses, or subsequent offenses, rack up whichever is more: $1,500 if the municipality does not impose a civil penalty, or 50 percent of the gross monthly revenue for the month in which the incident occurred; or the difference between the preceding amount and the civil penalty levied by the municipality.
Of course, you can appeal. If the Arizona Department of Revenue has imposed a civil fine, you may be able to get it reduced as long as you can prove that you posted the laws that your renters violated, and they should have known better.
Goodman Holmgren Smith exists to make the work of HOAs as easy as possible. We specialize in Arizona HOA legal counsel, and provide tailored help for each of our clients. Are you looking for a homeowners’ association attorney in Arizona? Contact us today for more information.