Last week we blogged about the association’s ability or perhaps inability, to limit the number of rentals in the community. We also discussed the differences between the condominium statute and the HOA statute regarding same. This week, let’s focus on a related topic, short term rentals.
Most governing documents contain clauses that require leases to be for a minimum term, i.e. not less than six months or not less than ninety days. The clear intent of these provisions is to prevent the community from becoming transient in nature. You don’ want the place to in effect become a hotel, with people constantly moving in or out, by the month, week or even by the day.
Here’s the problem. Lots of people have figured out that they can make a lot more money renting out their condo or home by the day, instead of by the month. Your ocean front condominium for example may rent for $2,500.00 per month, but can also be rented for $200.00 per day or $6,000.00 per month. But what do we do about those pesky restrictions in the governing documents that say I’m prohibited from renting my unit for a term less than ninety days for example?
The most common scam is that the unit owner says that “I’m not renting the unit. Those people are not my tenants. I have a large family and they are all family members.” Now don’t get me wrong….. diversity is wonderful. But when the alleged family is made up of Jews, Muslims, Blacks, Whites and Koreans, excuse me for being a little skeptical. I just don’t buy it. The problem is however, how do you prove the owner is lying? Since governing documents also usually contain language indicating that the unit may be used by the owner and his or her family members, technically the association must let the family members stay.
Some other owners take the position that ”I’m not charging these folks anything to stay in my unit, so that means they aren’t my tenants, they are my guests.” The documents allow me to have”guest” so leave me alone. Of course ”guests” don’t wind up paying money to stay in your home, but proving that these ”guests” are actually short term “tenants” and that they pay money, is often times impossible.
So, how do we catch the bad guys who completely ignore the short term rental restrictions in your community? One way may be to simply set them up. You heard me – set them up. So many of these owners are brazen enough to advertise their units on a multitude of short term rental websites. When you see these advertisements, print them out and save them. Then call them and try to reserve it for a night or two. I would have no objection if the association even had to pay for the room for a night or two in order to catch the owner in the act. And when you find out and can prove which unit was advertised and actually rented to you for a night or two, you sue the owner and get an injunction and your attorney’s fees assessed against him or her. And afterwards……. you publicize the hell out of it in the community newsletter as a warning to everyone else who thinks the Board members and management are dumb enough to believe that you have that many family members who actually like you enough to come visit.
There may be another way to at least slow down the law breakers. You can severely limit the term ”family” in your governing documents to only include “children or parents of the owner.” Everyone else will be considered a “guest.” You then take it one step further and amend your documents to say that ‘guests” can only occupy the unit if the owner is present. If you can prove that the guests were occupying the unit in the absence of the owner, go get your injunction.
There is no perfect solution to this problem. As we all know, every time a process is put in place to catch bad guys, the bad guys figure out a way to get around it, or make a valiant effort. Doing nothing and ignoring the problem is certainly not the solution however. I’m all ears if any of you have dealt with this issue before and have figured out a way to combat it.