HOA says they don't want AirbNb rentals, but no guidance in CC&R?

13 Replies

I have a townhome in Arizona that I'd like to AirbNb. Called the HOA to make sure it would be legal. They said they don't *want* that type of rentals in the community, but when I asked them for specific guidance in the CC&Rs, the only thing that they could point me to is this clause:

"Use of Individual Units. No unit or Townhouse Building there on shall be occupied and used except for single family residential purposes by the Owners, their tenants and social guests, and no trade or business shall be conducted therein, which impacts upon or involves the use of, the common areas"

I don't see where it explicitly prohibits STRs, but don't want to get on the wrong foot with the HOA. How should I proceed?

The lawyer for our HOA had a different interpretation of a similar clause.

Renting a property out for short term for somebody to sleep in and use as a temporary dwelling "probably" conforms to the usage of a property for residential purposes.  Commercial purposes  (trade or business) would be running a massage salon or repairing trucks from it or the like, with associated use of the common property by multiple customers in a business open to the public.

The attorney did not feel that AirBNB necessarily went against that. He then indicated some lawsuits in other states (not where I am in Colorado) where the HOA lost trying to prohibit short term rentals under similarly worded clauses. But since there had not yet been a case in Colorado, he could not state whether he thought the HOA could prohibit it or not.

So this is a really grey area and I'm not sure you'll find a definitive answer here.

Try a MTR (Medium Term Rental) with your property. Furnish it like you would with a STR, but find gainfully employed tenants such as travelling nurses, project managers, visiting professors and such. That would differentiate it from an AirBnB type of property usage.

@Ada Tor I don't think that verbiage is enough to conclusively say STR is banned. While the HOA has a strong argument using this clause against you, I think you have an equally strong argument that the spirit of that clause was to stop owners from selling products or services out of the home, not to stop STR. All that being said, you're most likely to just get them mad and their next priority will be to add a clause that specifically forbids short term rentals. If you start STR, make sure you have an exit plan.

It would be risky to continue because HOA can adjust the rules going forward by taking a vote by the owners. So even if interpretation of the current rules says it is OK, you might eventually get shut down.

HOA = RUN AWAY! I am invested in Scottsdale @Ada Tor and have had multiple units in HOA communities, one of which I have sold, another will likely hit the market after high season next spring. When the community doesn't want STR's they are going to aggravate you with complaints or attempts to change their CC&R's. I am working my way out of any HOA communities as you may be aware that the State of AZ has legalized STR's but HOA's may disallow them. If you're really interested in creating a new business, use those HOA dues to make a new investment, maintain it yourself, and forge your own success - it will be well worth it.

@Ada Tor the language in CCRs that specifically bans short term rentals usually reads something like this "No unit shall be rented for a term of less than 30 days". 

Based on your research, it sounds like your CCRs don't have that language, so the management company is trying to cite another (flimsy) clause to try and dissuade you from doing a short term rental. If they wanted to amend the CCRs to explicitly ban short term rentals, they would have to put it to a vote and that costs money and time with no guarantee of success. 

I've helped several clients purchase condos in Scottsdale in communities that explicitly ALLOW short term rentals per the CCRs. They've had great success and are gearing up for another high season!

No legal advice given or implied. 

Your HOA probably has provisions in the ccrs to fine owners for violations. If not specifically VRBO they'll get you for noise, parking, garage doors too many people in the subject property. You can anticipate, fines, autos getting towed for being in the wrong parking spot. I'd pass.