The numbers don’t lie. As a vacation destination, Florida is where it’s at. Everyone, from all over the world wants to lounge on our beaches and play in our sun. This has created a fantastic financial opportunity for those who own condominium units or homes located in a desirable community. A condo owner for example, may be able to make the mortgage payment simply by putting their unit on Air BNB for a few days in a row. Do it the entire month….. and you’re earning some serious cash.
Needless to say, there are many people who oppose an owner who basically seeks to turn the condo or home into a motel. And who can blame them? I certainly would not want the condo unit next door to mine being occupied by different people 300 nights a year. The question is……. is there anything a condo or HOA can do to stop it? The answer depends upon what your governing documents currently say.
Suppose the governing documents of your condominium or HOA say that your unit can only be used for “residential” purposes? Are you violating your governing documents by renting out your unit each night? Is it now being used for “business” purposes? Or, is it still being used for “residential’ purposes?
This question was just answered by Florida’s 1st District Court of Appeal in a case called Santa Monica Beach Property Owners Association v. Acord. Believe it or not, this was actually a case of first impression in Florida. The first thing the Appeals court did was look at how other states around the country have dealt with this issue and those courts have almost uniformly held that short term vacation rentals do not violate restrictive covenants. The court said that “The critical issue is whether the renters are using the property for ordinary living purposes such as sleeping or eating, not the duration of the rental.” The court cited another case where that court said “If a vacation renter uses a home for the purpose of eating, sleeping, and other residential purposes, this use is residential, not commercial, no matter how short the rental duration.”
Condominiums and HOAs should not completely freak out over this case. In this case keep in mind that the association had no provision in its governing documents that said a rental term must be for at least 30 days, or 6 months or a year. The docs in this case were silent on that issue. So……. the only thing the association had to hang its hat on was this language that said you can’t operate a “business.” And the court said people sleeping and eating in a unit is not the same as a business being operated out of that unit.
Condos and HOAs can still prevent units from being rented out on a nightly basis — as long as the governing documents specifically prohibit short term rentals and require a minimum number of days. The problem is that many documents do not contain these very specific provisions. If your documents don’t have these provisions and you want to limit short term rentals, it’s time to amend the governing documents.