Short-term rentals have gained popularity because they allow owners or tenants to make a little extra cash. These accommodations also give travellers an affordable option to traditional hotels. Platforms like Airbnb, Vrbo, and Homestay make it easy for hosts to connect with guests.
Unfortunately, a minority of short-term rentals create problems for the permanent residents living next door or close by. Loud, crowded parties anger and frustrate owners who live in the association. In condo communities, the guests may cause damage to shared amenities or other common property.
Moreover, owners don’t like it when there’s a new group of people coming in and out of the neighbourhood every weekend. As such, many condo and HOA associations have created rules to try and minimize wild weekend parties without outright banning short-term rentals.
Why short-term rentals can be problematic for residential communities
Short-term rentals usually last between one and ten days. If an owner or tenant regularly uses their home for short-term rentals, there could be a new set of strangers entering the community every couple of weeks.
To prevent this from occurring, the association’s governing documents may set clear limits on the minimum period of time a person could rent out their home to someone else. For example, the minimum term of a lease in the association must be at least six months.
Short-term rentals can be problematic for residential communities because:
- They create a security concern among other owners/occupants. Keys or access codes that only members should have may be shared with complete strangers
- They may accelerate regular wear and tear to the common elements or use of the condo’s/HOA’s amenities due to increased usage
- Short-term occupants and their guests may use the unit for loud, large parties
- The community has banned short-term rentals, but owners continue to advertise their units on short-term rental websites anyway
- Short-term rentals were previously allowed in the community, but owners refused to comply after the rules were changed
Condos and HOAs are permitted to have their own rules in place to address short-term rentals. However, like all rules, they should be both reasonable and enforceable. These provisions can be found in the corporation’s/association’s governing documents.
Condos and HOAs can ban short-term rentals
A condo’s/HOA’s declaration, CC&Rs, or rules may include stringent requirements regarding rentals. All owners are obligated to follow these rules. Some developments may not allow owners to rent out their units at all, but that is rare. It’s more likely that the development will have a minimum requirement on how long a renter must stay in the unit (six months, one year, etc.).
Condo/HOA communities create these rules to help minimize unreasonable interference with the use and enjoyment of the units, neighbourhood, or common elements of the building. They are also put in place to promote the safety, security and welfare of the owners and property. In other words, short-term rental rules are made to ensure that all of the members who live in the area (and pay regular fees) can enjoy their building or neighbourhood.
Associations/corporations may change the rules and ban short-term rentals if they become overly problematic, but that will usually require majority support from all owners belonging to the association.
Regardless of whether your condo/HOA allows short-term rentals, some municipalities have prohibited all short-term rentals, or require buildings to follow certain rules before they can engage in short-term rental activities (for example, obtaining a licence or registering as a short-term rental operator with the municipality). Associations must abide by these rules if they exist.
Enforcing short-term rental rules
In exchange for the perks and privileges owners receive, they are expected to follow the rules and make some compromises. After all, it’s not always easy co-existing with neighbours. Unfortunately, not everyone will follow the rules, and when this happens, the association is obliged to do something about it. Otherwise, if there were no consequences for breaking the rules, people wouldn’t be too concerned about following them.
When enforcing the rules, associations must apply consistent enforcement efforts against all community members. That means following a system. Most communities will have some sort of violation schedule that lays out consequences for breaking the rules. Having a system helps ensure fair and systematic enforcement, and gives the board or management team a clear course of action.
Like any other rule enforcement situation, condos/HOAs are encouraged to follow these four steps when a short-term rental issue is brought to its attention: investigate, communicate, escalate and litigate.
Boards and managers are discouraged from taking a knee-jerk reaction when a complaint about a short-term rental comes in. Without evidence, the association is not in a position to take action against the alleged offender.
At this stage, the condo/HOA needs to log complaints and perhaps talk to neighbours who live beside or across from the short-term rental unit. Ideally, complaints should be made in real time, and the board or management should encourage owners to report issues to security or concierge if possible. This way, they can verify if there is an issue and the severity of the problem. If the guests are unreasonably loud or rowdy, the employee on duty may take immediate action and even call the police to end the party. However, it’s the owner, not the guest, that must be held responsible for breaking the rules. As such, putting an end to the party doesn’t end the enforcement process.
It’s important to note that a rule must have been broken in order for an association to issue a violation or punishment. If short-term rentals are not allowed under any circumstances, or if the noise level has been inappropriate every weekend, then the corporation should pursue the complaint. However, if short-term rentals are allowed, and the guests were respectful, then there isn’t much a board can do; even if some owners are upset that short-term renters are regularly passing through the building.
If there is evidence to show that a short-term rental rule has been broken, the next step is to make the problem known to the owner. Most condos/HOAs would send out a warning letter at this point. If a long-term renter is advertising the unit on a short-term rental site, then a letter would be sent to both the owner and tenant. It is vital that owners are copied on those communications as it gives them a reasonable opportunity to connect directly with the tenant. The owner may have no idea that the unit is being occupied by short-term renters.
The letter should advise the recipient that:
- A complaint has been received,
- That the corporation/association will investigate future complaints, and
- What will happen if the issue persists.
Don’t forget to update the person who submitted the complaint. Let them know that their complaint is being taken seriously, and when next steps will be pursued if the issue has not been remedied. Request that they immediately notify security or management if the same problem occurs again.
The condo/HOA should look to its governing documents to see what actions to take after an initial warning letter has been delivered. Some states regulate how and when an association can penalize owners, so make sure to follow the rules closely.
Many condos and HOAs will be required to send at least two letters before imposing monetary penalties or fines. The association must provide the owner with actual notice of the violation before a fine is charged. This due-process requirement is not only compulsory, but it gives owners a fair chance to correct the issue.
In the United States, condos might issue a fine, and if the problem persists, they will take more aggressive steps such as suspending voting rights or restricting access to shared amenities.
In extreme cases, it may also be possible to place a lien on the property, depending on state laws. However, most issues never reach this point.
In many Canadian provinces, condos will get their lawyers involved instead of issuing violations. A lawyer will write an enforcement or compliance letter, and let the owner know that the short-term rental issue will be brought to court if it persists. The condo may also charge costs to the owner, meaning they are obligated to pay the fee charged by the lawyer for writing the letter.
The last step for condos/HOAs grappling with short-term rental issues is litigation. This is the most expensive and time-consuming option, but most disputes will never get here. Some condos will be required to go through mediation and arbitration before heading to court; it all depends on where you live and what your governing documents say.
Mediation is a process where a neutral facilitator tries to help the association and owner reach a mutually agreeable solution. Mediation is often less costly, and it gives the parties an opportunity to finding a solution that they can both live with.
If mediation fails, arbitration is the next step. Arbitration is a process where an arbitrator conducts a hearing and makes a ruling on the dispute based on the facts presented by each side. Arbitration is less flexible than mediation, but may still be less costly than court.
This is the final step. A judge will review evidence from both sides and make a decision based on the facts presented. Depending on the nature of the case, a judge may order the unsuccessful party to pay some or all of the other party’s legal fees, in addition to whatever they owe to the successful party.
Enforcing Airbnb and other short-term rental rules is similar to enforcing any rule. Just ensure that the association or corporation acts swiftly, maintains good communication with all parties involved, and follows the enforcement process laid out in the governing documents.