Q: How can a homeowners association regulate landlords who rent out their homes to short-term guests? If the association were to apply a fine, how could it recover it? (EH, via email)
A: The starting point is knowing what your governing documents and local laws say on the subject. For example, some municipalities limit rentals in residential areas to a minimum of 30 days, so violations could be reported to the local code enforcement agency.
Most documents limit the use of houses to “residential use”. These provisions have been the subject of much litigation in courts across the country and there is no clear test defining which activities constitute residential or commercial uses. However, courts have generally been reluctant to enforce a residential use provision as a restriction on short-term rentals, and there is at least one Florida appellate court decision to that effect.
Therefore, the most effective way to deal with rental restrictions is a specific provision in your Statement of Commitments setting out permitted and unauthorized rental durations. Many declarations contain such a provision, others do not. If your statement does not contain a rental limitation, it will need to be amended as indicated in the statement. Most declarations require some level of super-majority approval for modification, with two-thirds and 75% being the most common standards. Some declarations require that the vote be calculated on the basis of all eligible voters, and some provide that the calculation is based on those who vote at a duly called meeting at which a quorum is established.
You should also be aware that the Florida Homeowners’ Association Act was amended in 2021 to limit the ability of homeowners’ associations to change tenancy rights. The retroactive application of this statute to pre-existing associations is a complex and open legal question. The new law provides that amendments limiting the length or frequency of tenancies permitted apply only to landlords who vote in favor of the amendment, those who vote against the amendment or do not vote are grandfathered, but the amendment would be binding. on their heirs.
It is important to note that Section 720.306(1)(h) of the Florida Homeowners’ Association Act permits amendments prohibiting rentals for less than six months or prohibiting rentals less than three times during one calendar year to apply to all plot owners. whether the declaration is correctly modified, whether an owner voted in favor of the modification or not.
Once you have determined what the actual rule is, the next question is how you apply it. As noted above, if the rental violates local ordinances, referring the matter to code enforcement can be an effective and inexpensive way to seek redress.
Imposing fines and suspending rights to use the common space is one, but probably not the most effective avenue for this type of violation. Many homeowners associations lack the level amenities where suspending the right to use them deters violations. Fines are capped at one thousand dollars in total for continued violations, unless the governing documents authorize a higher amount. There is also a somewhat detailed notice and hearing process that must be followed to impose a fine or suspension. If a fine is properly imposed, it may be a lien on the house if it is a thousand dollars or more and the language of your documents may also come into play. Otherwise, the place of collection of a fine is small claims court, and the prevailing party in an action for the recovery of a fine is entitled to recover its attorney’s fees from the losing party.
The best approach for this type of violation is direct legal action by the corporation against the landlord seeking a court order (injunction) to enforce the rule against short-term rentals. Well-drafted documents can give you extra leverage in a lawsuit. Generally, the winning party can collect its legal fees from the losing party. The association’s attorney should be briefed early in the process, so that they can advise you on any pre-suit steps that may be necessary to protect your ability to enforce the restriction.
Joe Adams is an attorney at Becker & Poliakoff, PA, Fort Myers. Email questions to Joe Adams at [email protected] Previous editions can be viewed at floridacondohoalawblog.com