Hoa's Power: Restricting New Airbnb Laws In Condos

The rise of Airbnb and other home-sharing services has led to many homeowners' associations (HOAs) considering covenants to ban short-term rentals. HOAs can ban the use of Airbnb if they already have deed restrictions in place prohibiting the commercial use of parcels. However, this raises the question of whether an HOA can impose such a restriction without violating the rights of the homeowner. In Michigan, for example, HOA members have a common-law right to try to enhance the value of their property through contractual agreements concerning the use and development of their real property. While a covenant prohibiting short-term rental arrangements does not impact a homeowner's ability to sell the property, it may be more difficult to sell than a similar property that is not subject to HOA oversight.

The HOA can ban short-term rentals if they follow their stated amendment process

For homeowners who are subject to HOA oversight and controls, the enactment of a ban on short-term rentals is permissible, so long as the HOA follows its stated amendment process. An HOA may already have the power to ban the use of Airbnb, VRBO, and other short-term rentals under their current deed restrictions if prohibitions against “commercial use” of parcels are already in place.

State courts have long held that restrictions enacted by HOAs can and will be binding so long as they have been properly passed subject to amendment processes laid out in their controlling documents. If the Association's declaration prohibits rentals (short-term or long), then the HOA can likely enforce the prohibition unless there is some other reason why the restriction is unenforceable.

It should be noted that a covenant prohibiting other short-term rental arrangements does not impact a homeowner’s ability to sell the property, though it may be more difficult to sell than a similarly situated property that is not subject to HOA oversight. There can be serious consequences to flouting the HOA rules, including fines, legal action, or other restrictions.

HOAs can ban Airbnb if they have deed restrictions against 'commercial use'

Homeowners' Associations (HOAs) can ban Airbnb if they have deed restrictions against commercial use. If an HOA's declaration prohibits rentals (short-term or long-term), then the HOA can likely enforce the prohibition unless there is some other reason why the restriction is unenforceable.

For homeowners who are subject to HOA oversight and controls, the enactment of a ban on short-term rentals is permissible, so long as the HOA follows its stated amendment process. An HOA may already have the power to ban the use of Airbnb, VRBO, and other short-term rentals under their current deed restrictions if prohibitions against “commercial use” of parcels are already in place.

State courts have long held that restrictions enacted by HOAs can and will be binding so long as they have been properly passed subject to amendment processes laid out in their controlling documents. It should be noted that a covenant prohibiting other short-term rental arrangements does not impact a homeowner’s ability to sell the property, though it may be more difficult to sell than a similarly situated property that is not subject to HOA oversight.

There can be serious consequences to flouting the HOA rules, including fines, legal action, or other restrictions. To assess your community’s rules and restrictions regarding Airbnb rentals, consult the CC&Rs.

Short-term rental restrictions do not impact a homeowner's ability to sell their property

Homeowners' Associations (HOAs) can restrict short-term rentals, such as Airbnb, so long as they follow their stated amendment process. If prohibitions against "commercial use" of parcels are already in place, an HOA may already have the power to ban the use of Airbnb.

However, short-term rental restrictions do not impact a homeowner's ability to sell their property. While it may be more difficult to sell a property subject to HOA oversight, state courts have held that restrictions enacted by HOAs are binding so long as they have been properly passed subject to amendment processes laid out in their controlling documents.

In Michigan, HOA members have a common-law right to try to enhance the value of their property through contractual agreements concerning the use and development of their real property. This means that while an HOA can restrict short-term rentals, it cannot violate the rights of the homeowner.

It is important to note that there can be serious consequences to flouting HOA rules, including fines, legal action, or other restrictions. Homeowners should consult the CC&Rs to assess their community's rules and restrictions regarding Airbnb rentals.

There can be serious consequences to flouting HOA rules, including fines and legal action

Homeowners' Associations (HOAs) can restrict Airbnb and other short-term rentals, so long as they follow their stated amendment process. If prohibitions against 'commercial use' of parcels are already in place, an HOA may already have the power to ban the use of Airbnb.

There can be serious consequences to flouting HOA rules, including fines, legal action, or other restrictions. State courts have long held that restrictions enacted by HOAs can and will be binding so long as they have been properly passed subject to amendment processes laid out in their controlling documents.

In Michigan, HOA members have a common-law right to try to enhance the value of their property through contractual agreements concerning the use and development of their real property. However, it should be noted that a covenant prohibiting other short-term rental arrangements does not impact a homeowner's ability to sell the property, though it may be more difficult to sell than a similarly situated property that is not subject to HOA oversight.

In Michigan, HOA members have a common-law right to enhance the value of their property through contractual agreements

The fundamental purpose of a homeowners' association is to benefit the community and its members. This often involves maintaining common areas, ensuring homeowners keep up their properties, and pooling resources for the benefit of the entire community. For example, an HOA might use pooled resources for road and sidewalk repairs or snow removal. Ultimately, the goal is usually to increase property values and raise the living standard in the community.

In the context of Airbnb and other short-term rentals, HOAs can impose restrictions on real property interests without violating the rights of the homeowner. For example, an HOA may enact a ban on short-term rentals, so long as it follows its stated amendment process. Additionally, an HOA may already have the power to ban the use of Airbnb if prohibitions against "commercial use" of parcels are already in place.

It is important to note that there can be serious consequences for flouting HOA rules, including fines, legal action, or other restrictions. Homeowners who are subject to HOA oversight and controls should carefully review the CC&Rs to understand their community's rules and restrictions regarding Airbnb rentals.

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