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SHORT-TERM RENTALS – SHOULD YOUR HOA CONSIDER BANNING THEM?

In early June, 2019 at an apartment in uptown Charlotte, gunfire erupted at a graduation party. One person was killed and three more were injured, one of them critically. Residents of the entire complex were forced out of their units into the street in the middle of the night while the police conducted their investigation. The local news reported that the apartment had been rented through Airbnb, a short-term-rental company.

While the recent event described above involved an apartment complex and not a condominium, that difference is immaterial. Owners and residents in communities everywhere, whether single-family homes, condos, or townhomes, are justifiably concerned about the proliferation of short-term rentals. There are identifiable risks posed by the short-term rental of a home to someone about whom you know nothing or very little, and it is impossible to predict what the renters or their guests will do on the property during their brief stay.

Despite the rapid growth of short-term rentals, laws regulating them are virtually nonexistent (except in primarily tourism-driven markets like Asheville, North Carolina, or Charleston, South Carolina), leaving owners looking to their HOAs for help.

Some HOAs have restrictions in their governing documents that prohibit leases of homes of less than a stated term, such as six or twelve months. Others have language in their governing documents that grant the HOA board the authority to develop leasing rules and regulations, and this may give an HOA the right to impose controls on short-term rentals.

If your community’s governing documents don’t contain such restrictions, the governing documents will need to be amended to limit or prohibit short-term rentals, if that is the desire of the community. A limitation or prohibition on short-term rentals may not be desirable for some communities, such as resort or vacation communities where many of the homes were purchased as investments for the express purpose of renting them on a weekly or daily basis.

Having a community restriction against short-term rentals is, of course, only the first step. Enforcing such restrictions is another issue. HOA boards should, at a minimum, make owners aware of any restrictions on short-term leases, investigate reported violations, and enforce them consistently and uniformly. Finding an active listing on the Internet for the home or unit with a short-term-rental company is often the first step in enforcement.

We reprinted a column authored by another attorney in 2016 that provided information on websites than can help HOAs identify short-term lease listings in their communities. That column can be found here:

https://carolinacommonelements.com/2016/09/28/new-services-help-associations-thwart-unauthorized-short-term-rentals/

This column was originally published in the Home|Design section of the Charlotte Observer on June 29, 2019. © All rights reserved.

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