Real Estate

‘Short-term rentals’ are dirty words for some condo associations

If your community has a minimum lease term or prohibitions against commercial usage of a unit, it can still be a challenge to rein in short-term rental activity.
If your community has a minimum lease term or prohibitions against commercial usage of a unit, it can still be a challenge to rein in short-term rental activity. Getty Images/iStockphoto

Short-term rentals are dirty words in some condominium, cooperative and homeowners’ associations. Many directors and residents believe that short-term rental activity and the nuisance and security concerns it brings are simply incompatible with a residential lifestyle, so prohibiting the activity altogether is the goal for these communities.

The majority of out-of-state and international owners in other communities depend in large part on short-term rentals to cover the carrying costs for their units, so these communities may seek to regulate, but not prohibit, the activity.

For most folks, Airbnb’s brand has become synonymous with short-term rental activity, but there are a host of other companies that provide online platforms for owners to monetize their homes. Unless your community is brand-new, most boards are struggling to use decades-old governing documents to address a problem borne out of a business model that did not exist when their community was created.

If your community has a minimum lease term or prohibitions against commercial usage of a unit, it can still be a challenge to rein in short-term rental activity. Paying guests are often advised by their Airbnb hosts to identify themselves as family members or non-paying guests if their identities are questioned, and the courts have held thus far that Airbnb constitutes residential, not commercial, usage.

An association interested in prohibiting or regulating short-term rental activity has the following options:

▪ Amend the governing documents to specifically prohibit or regulate short-term rental activity including the advertising of properties online for such purpose. For condominium associations, this kind of amendment, depending on the verbiage used, may only apply to existing owners who vote yes or new owners who take title after the amendment has been recorded in the Public Records. Ask your association attorney how to best avoid the application of Section 718.110(13), F.S. when crafting your short-term rental amendment.

▪ Suspend a violator’s right to use the common areas. This tool is particularly effective as the suspension will prevent not only the violating owner but also his or her Airbnb guests from using areas like the pool, tennis courts and fitness room. Since most guests choose a property based not only on its location but also on the advertised amenities, reviews from past guests advising that those amenities were closed to them might cast a chilling impact on future short-term rentals. It is important to remember that common area suspensions may only be used after statutory procedures are strictly followed and are only useful if your association has the ability to keep people out of the common areas through the use of a key fob or similar access control system. For communities struggling with an influx of short-term renters posing as non-paying guests, it may make sense to invest in an access control system if one doesn’t currently exist.

▪ Amend the governing documents to define which guests may be present in a residence in the owner’s absence and for how long. Some communities even require owners to be present when welcoming non-family member guests to the community, which naturally casts a pall on serial short-term rental activity.

▪ Create protocol to determine if any properties in your community are currently advertised on sites like Airbnb, VRBO, Homeaway, etc. There are also companies that engage in this kind of online monitoring on an association’s behalf for a fee.

Airbnb has actively defended and expanded its lucrative business model by litigating the issue to avoid classification as a commercial use and to advance legislation to prohibit local restrictions which might impact them.

A bill was filed in the 2019 legislative session in Florida that defined renting one’s property as a vacation home as a “constitutional right” protected from impairment by local restrictions. There is no restriction more local than those found in your governing documents. This legislation is likely to resurface in future years, so the need for your community to address the issue of short-term rentals in your documents is now.

While people often enjoy the convenience and price points associated with Airbnb while on vacation, many still want their home communities to remain sacrosanct.

Donna DiMaggio Berger is a shareholder at Becker Law, a board-certified specialist in condominiums and planned development law, and the executive director of the nonprofit Community Association Leadership Lobby.

▪ This opinion piece reflects the view of the writer and not necessarily that of the Miami Herald | Business Monday.