Question to anyone that knows about HOA rules and regulation. I had purchased a property in Seattle earlier this year, it is was my 2nd home. Bought it with the sole purpose of renting it out on Airbnb. When I was going to purchase this, I had asked the listing agent who happened to work for Redfin several times if there were any rules against Airbnb. She assured me there wasn't, so I went ahead to purchase the home thinking it was okay to do this.

I furnished the place and listed it on Airbnb. Bookings started pouring in and I thought everything was great! Then I received a letter from the board saying that I was violating the CC&R. After much research, I found out this was a common thing with HOA. I probably will never buy another property with an HOA. With that said, this is a brand new development that is currently being managed by a 3rd party management company and not actually the residents yet.

There was an HOA hearing where my Airbnb was a major topic of discussion. The room seemed divided on if we should be able to use our homes as an Airbnb if we wished, I think maybe even a little more for it than against it. Even during the meeting, the president did state that he couldn't charge me any fines. In the CC&R there is a clause for rentals for under 30 days but it did not state on how much they would charge if you did not abide by this. I have received maybe 3 notices now and just received another one stating it was it's last notice before they would start to impose fines.

My main questions are

1.) Can the HOA charge me a fine if it was not stated how much they can charge me in the CC&R?

2.) What would you do if you are in my shoes?

Any advice would be muchly appreciated.

1) They can certainly charge you a fine. Since it is not stated, I'm guessinf it is essentially up to them within a reasonable amount. That's just how it is with HOAs.
2) Plan B. There's no way to keep going as an Airbnb until it is somehow changed with your HOA. You can sell or rent it long-term within your HOAs requirements.

Most new development HOAs have very strict rules and bylaws for renting. I think it was up to you, not the listing agent, to do your research and make sure this is the property that you want before closing. Ask for HOA documents and bylaws. However, the listing agent does have some fault in this, but i really doubt there is much you can do about it. Also, isn't there a Seattle law prohibiting Airbnb/short-term rentals to only 60 days or something out of the year if it is not owner-occupied?

If there is no defined amount of a fine and they decide to fine you the board can easily just vote for a fine amount and then impose the fine. They can vote to change the rules any time they want, in any way they want, subject to the WAC and the USC of course. One reason I recently sold my house and moved, my old HOA was taken over by power hungry people that didn't care about hurting the value of their own property... my old HOA, they would do things like they wouldn't let a resident build a fence though it wasn't against the rules and she was building it to match the other fences that are in place. More often than not HOA's get taken over by the tyrannically minded, imo.

The easiest course forward is to sell, buy something without hoa, nor CC&rs, 

Get on the board of the HOA and change the rules to your favor

If there is no statement of pricing for the fine it's fair game.

As for what to do now I would rent it quickly and take advantage of the cashflow till the HoA figures out what rules and regulations apply for Air BNB

Originally posted by @Matthew Paul :

Get on the board of the HOA and change the rules to your favor

I am planning on this right now. Not sure when this will happen because the board is still ran by a 3rd party. They are still developing there. Do you think the real board of residence will form after they complete the construction?

Originally posted by @David Michael :

If there is no statement of pricing for the fine it's fair game.

As for what to do now I would rent it quickly and take advantage of the cashflow till the HoA figures out what rules and regulations apply for Air BNB

 So you think they can charge me whatever they want If the amount is blank?

Technically yes, The best way you can protect yourself is if there is equity sell. If there is not find out who else was fined in a similar fashion and be prepared to hire a lawyer. The associations respond best to a person that is lawyered up.

Honestly to avoid all this you can also work it out with the association  tell them you didn't know. It is not worth the trouble to go to the courts if a simple conversation with the board member of your choosing can fix everything. 

Get on the condo board ASAP. You'll find out that no one wants to be on the condo board. I became Vice President because it gave me a voice and essentially my tasking is non existent. Secretary is by far the most work.

If people do not want to change the condo law then explain to them how the short term rental/vacation rental is actually benefiting them in the case they ever were to sell.

Try to find other people that are trying to do the same thing as you (short term rentals, air bnb) and try to get them on the board as well.

Hope this helps!

The OP said the developement is ongoing so the developer is almost certainly still in control of the HOA/the HOA isn't even formally in existence... I'd doubt the OP can get on the board because there is no board yet... Depending how it reads the HOA might not even technically exist yet until all the units are sold and the developer releases control.

That's typically how it works because think about it, if you're a developer and you're going to take 2-3-4 years to complete a site? Do you want to deal with a board and HOA as you sell units off, as yours and the residents interests diverge? No. You want to make all the rules until the last unit is sold, that's typically how it works.

Incidentally, you'd also want to double check that if the developer is supposed to be paying dues into the HOA while they still retain control of units, that they are actually doing that. Don't let them not pay or promise to pay later... what if they declare bankruptcy? Your HOA starts off with no money? That = a huge assessment right off the bat.

So if it was me I'd rent it until I could sell it, cut my losses to a lesson learned.

Hi Tommy,

I have experience with an HOA shutting down my Airbnb. I now rent the property long term. The classic bait and switch from the realtor. Realtor's have such a conflict of interest when it comes to helping their clients. Their are incentived to get a deal done and earn comission. Not to make sure the right property fits the right buyer. As you learned the hard way here.

Most HOA's have boilerplate regulations copied from 30+ years ago. And all the bi-laws I've seen explicitly prohibit using your primary residence for business purposes. They can stretch that along with any short term rental clause that may apply to Airbnb.

Sucks, but that's why short term rental property investors value properties without restrictions. I myself will never buy another property with any sort of HOA. It's rare, especially in dense urban neighborhoods, but you can find them.

Bradley

Originally posted by @Bradley Chiakas :

Hi Tommy,

I have experience with an HOA shutting down my Airbnb. I now rent the property long term. The classic bait and switch from the realtor. Realtor's have such a conflict of interest when it comes to helping their clients. Their are incentived to get a deal done and earn comission. Not to make sure the right property fits the right buyer. As you learned the hard way here.

Most HOA's have boilerplate regulations copied from 30+ years ago. And all the bi-laws I've seen explicitly prohibit using your primary residence for business purposes. They can stretch that along with any short term rental clause that may apply to Airbnb.

Sucks, but that's why short term rental property investors value properties without restrictions. I myself will never buy another property with any sort of HOA. It's rare, especially in dense urban neighborhoods, but you can find them.

Bradley

 Hi Bradley, thanks your response. Can you tell me more of the process of how they shut you down?

Originally posted by @Tyler Mullen :

The OP said the developement is ongoing so the developer is almost certainly still in control of the HOA/the HOA isn't even formally in existence... I'd doubt the OP can get on the board because there is no board yet... Depending how it reads the HOA might not even technically exist yet until all the units are sold and the developer releases control.

That's typically how it works because think about it, if you're a developer and you're going to take 2-3-4 years to complete a site? Do you want to deal with a board and HOA as you sell units off, as yours and the residents interests diverge? No. You want to make all the rules until the last unit is sold, that's typically how it works.

Incidentally, you'd also want to double check that if the developer is supposed to be paying dues into the HOA while they still retain control of units, that they are actually doing that. Don't let them not pay or promise to pay later... what if they declare bankruptcy? Your HOA starts off with no money? That = a huge assessment right off the bat.

So if it was me I'd rent it until I could sell it, cut my losses to a lesson learned.

 Yes, worst case I would rent it out shorter 30 day terms to 6 month terms. I've been riding this for the last 3 months and will strech it out for as long as I can. My question was about how much they could charge me. If it was reasonable I would absorb the cost of it and continue do what I am doing. That is my dope. 

Originally posted by @Tommy Quach :

Originally posted by @Bradley Chiakas:

Hi Tommy,

I have experience with an HOA shutting down my Airbnb. I now rent the property long term. The classic bait and switch from the realtor. Realtor's have such a conflict of interest when it comes to helping their clients. Their are incentived to get a deal done and earn comission. Not to make sure the right property fits the right buyer. As you learned the hard way here.

Most HOA's have boilerplate regulations copied from 30+ years ago. And all the bi-laws I've seen explicitly prohibit using your primary residence for business purposes. They can stretch that along with any short term rental clause that may apply to Airbnb.

Sucks, but that's why short term rental property investors value properties without restrictions. I myself will never buy another property with any sort of HOA. It's rare, especially in dense urban neighborhoods, but you can find them.

Bradley

 Hi Bradley, thanks your response. Can you tell me more of the process of how they shut you down?

They tried to lock me out of my own condo complex, removed the gate code so I could only enter the property via garage remote. They also threatened to fine me. The neighbor was creeping around taking photos of everyone who entered my condo and was building a file.  I told him to stop harassing my guests. Those are just some of the nonsense that I had to deal with.  

 I dragged it out a couple weeks, but eventually caved. 

Yes they can and they carry a lot of weight.

There's no accounting for people's choices so if it is not defined, can they charge you $15,000 a day, they can try I guess.  As long as they enforce the rule and the fine uniformly, you have little recourse.

What's more likely is they will cover themselves by instituting a fine amount first in step one, then step two they will fine you. Especially easy for them to get done anyway because the developer is in control of the HOA anyway right, right now it's his gold dude, he is making the rules.

I really think you should just sell or lease it out for longer terms until you can sell.

Originally posted by @Debra Vonne Collins :

Yes they can and they carry a lot of weight.

 Do you have an idea of how much they can charge?

You mean like a state law that says "the max fine any HOA can charge is $100"?

afaik no, there is no limit to what an HOA can charge, for fees, fines, special assessments, whatever. As long as they have it documented, why they're fining you and they enforce that rule and that fine on all residents uniformly, then I just don't see how you'd prevail.

They will most likely decide to make the fine high enough to ensure no one would choose to pay it.  Because they don't really want the fine, they want to control your behavior.

Which is why my and others advice is to sell.  Because trust me, this will not be the last time they will try to control your behavior and control your business.  They will just keep looking for other things you're doing wrong or they will try to back you into some other corner on something else later on.