HOAs work their muscles on short-term rentals

Short-term rentals have been a hot topic in the village of Oak Creek and Sedona since Arizona Governor Doug Ducey signed Senate Bill 1350 in 2016. Towns, villages were prohibited by law. and counties to ban short-term rental of residential properties in 2016.

At the time, Yavapai County, Sedona, Jerome, Tucson and Bisbee had short-term rental bans in place. strictly enforced.

Local supporters of allowing short-term rentals argued that the change would stimulate the economy and give homeowners more options for the use of their property.

Love them or hate them, there is little doubt that the interest in buying or converting homes and condos for short-term rentals has been making waves in local housing markets. and rental since the change in state law.

As a result, some have criticized them for exacerbating a host of local problems, including traffic, lack of workforce housing and declining school enrollment due to the conversion of long tenancies. term in short term rentals. Residents also complained that short-term rentals detract from the feel and appearance of the neighborhoods

Some locations in Arizona, such as Sedona, have lobbied the state legislature to repeal or significantly revise the law to give local governments greater control over STRs.

But one type of organizing body has never had to wait for elected officials to act. The new short-term regulations did not include any language on condominium or owner associations, which can enact restrictions or covenants, conditions and restrictions in deeds.

“It is generally believed… that the pre-emption of the legislator does not prohibit private organizations such as associations of owners [HOAs] to adopt or enforce regulations in this area, ”said a June 2019 blog post from the Scottsdale law firm Sacks Tierney.

Flexing muscles

Village HOAs use their power to limit short-term rentals.

In 2019, the Pinon Woods III Homeowners Association changed its CCRs to ban rentals of homes under 30 days. To enact the restriction, the HOA had to obtain the consent of 70% of the members.

Rentals under 30 days are also prohibited in the Sedona Golf Resort Community Association, and the HOA has reminded residents of the ban. A banner at the top of its website states that “short term rentals, less than 30 days, are not permitted”. The same message is written on flyers on bulletin boards all over the community. The leaflet warns members of a fine of $ 1,000 per day for short-term rentals and a fine of $ 500 per day for advertising short-term rentals.

In June, the Village of Oakcreek Association, which has 2,300 owner members, increased fines for owners who violate the HOA’s rental ban for less than 30 days, raising the fine for violations to $ 250 per day to $ 1,000 per day, or double the rental per night. advertised rate, whichever is greater. The HOA also removed the previous limit for maximum cumulative fines for short-term rentals.

VOCA director Deb Brewer told the association’s finance committee in June that she plans to take legal action when an offender’s account hits $ 10,000 in fines.

Brewer told VOCA executives it is difficult to determine exactly how many properties are being used for short-term rentals, but said: “We only have a handful [of homeowners] that are really causing problems.

Brewer said VOCA sends a letter to the offending properties every 10 days.

“I think we’ve put some pressure on them, and we’re going to continue, but bring them to court – that’s what is going to do,” she said.

HOAs in Arizona have successfully defended short-term rental bans in court. Paradise Valley’s Camelback Country Estates managed to halt a short-term rental in 2019 after taking the owner of a 10,000 square foot home advertised for $ 2,000 a night through Maricopa County courts.

However, HOAs must overcome certain hurdles in regulating STRs. An HOA must “clearly and specifically state the restriction [in its CCRs]. Otherwise, short-term rentals will be permitted, ”wrote Adam Martinez, president of real estate litigation for Rose Law Group, in a blog post.

The need for unambiguous language to enforce bans can be an issue for HOAs who wrote their CC&R before the rise of Airbnb, VRBO, and other popular rental platforms.

Martinez wrote, for example, that the HOA rules stating that houses can only be used as a “single-family residence” are not sufficient to prohibit short-term rentals because the courts have ruled that a short-term rental term can still fall under the term “single-family residence”.

Many older conventions also prohibit the “commercial” use of houses. It is not clear enough either.

“Prohibiting a CC&R from using a property for purposes other than” residential “or from using it for” commercial “purposes is not sufficient to allow an HOA to stop using the property. property as a short-term rental, ”the Phoenix firm said. Jaburg | Wilk wrote in a blog post.

VOCA, which approved its short-term rental ban in a vote of 564 to 452 in 2016, uses explicit language in its ban: “No owner will rent a lot or unit for a rental period of less than thirty. [30] days.”

Pinon Woods III uses similar language: “No transitional tenant will be accommodated and the lots will not be rented for less than thirty [30] days in duration.

Sedona Golf Resort’s CC&R language was not available on its website to non-members.

Bob McCann, a member of VOCA’s architectural rules and restrictions committee before stepping down this month because he is moving, said another issue for HOAs is identifying and documenting short-term rentals.

They aren’t always advertised on popular platforms, he said, and some listed there are only advertised for a minimum of one month, which is allowed by many HOAs. Hotels and condos in commercial areas also advertise on short-term rental platforms.

“What people really need to do when there is a short term rental, people need to call the [VOCA] office, ”he said. “They have to get involved. You can’t expect someone else to do it.

A recent VOCA newsletter had a similar message.

“If you would like to report what you believe to be an STR violation, please provide details [written documents, photographs, etc.] showing events and actions that may have occurred. Evidence of violations sufficient for legal action is essential for active enforcement to occur, ”the newsletter said.

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