Short-term rentals have become a hot-button issue in HOA communities. Their popularity is raising concerns in associations and possibly even opening them up to liabilities.
The main problem with short-term rentals in an HOA is that guests may not be aware the rental is a part of an association. Thus guests aren’t mindful of HOA rules. While homeowners may provide the information, more often than not, guests aren’t going to read them. When short-term rental guests violate HOA rules, it impacts the entire community.
Issues caused by short-term rentals:
- Parking
- Traffic
- Use of common areas
- Noise
- Pets
- Security
The HOA must have clear and concise rules to hold folks accountable for violations to keep the community safe for homeowners.
Examples of Rules for Rentals in an HOA
The governing documents of the HOA need to address this topic. If your CC&Rs do not address the issue or the language is antiquated, the Board needs to amend or update it. It is highly recommended that the Board reaches out to legal counsel before changing governing documents.
Long Term Rentals Only
Add language to the governing documents that prohibit rentals unless they are long-term. Long-term typically means 12 months or more. The HOA can require the homeowner to submit a copy of the long-term lease for approval. The terms must be clearly stated, and violations must be spelled out. The language will solve the issue of short term rentals and give the HOA enforcement, guidance, and penalty.
Minimum Rental Term
Rules for minimum terms allow homeowners to rent their homes for a minimum of 30 days. The terms must be clearly stated, and violations must be spelled out. Including a defined minimum term will eliminate the weekend warriors that may be causing the majority of issues.
Short-Term Rental Terms
If several homeowners in your HOA have rented their homes on a short-term basis, taking the option away might cause unnecessary strife. The HOA needs to create rules that address the terms of short-term rentals. The rules must state that homeowners will be penalized if their renters do not follow the HOA covenants. Penalties must be fair and enforceable.
Fines
If homeowners are listing their homes on short-term rental sites for an amount of time less than what is permitted, fines are an excellent way to get their attention. For example, the fine can be a large percentage of the rental rate listed on the site. The amount of the fines must be in writing, public knowledge, easily accessible, and enforceable.
Assessments
Some HOAs have started requiring homeowners to pay the Association when they rent their homes on a short-term basis. The money paid to the HOA compensates the Association for temporary parking passes and temporary use permits for the common areas. Use permits are created in the renter’s name using a valid form of identification. This practice is a win-win for the community. The HOA is not spending member dues for renter accommodations, and renters are held accountable for their actions while in the community. It is crucial that homeowners inform HOA management when their home is being rented on a short-term basis. Violations must be in writing, fair and enforceable.
As the short-term rental market grows, HOAs must be proactive by implementing specific policies. Prism Association Management can help your Board of Directors create an action plan. Contact us today at info@prismrp.com | 512-676-5842.
