Short Term Rentals

Shumaker, Loop & Kendrick, LLP

Does your Community Association have sufficient protections in place for Short-Term Vacation Rentals?

With the rise in short-term rentals through popular sites like Airbnb, Inc. and Vacation Rentals by Owner (VRBO), homeowners and condominium associations face new challenges in policing owners who violate restrictions against short-term leasing.  This is especially true in Florida where many people seek out vacation rentals every year.  Not only does this type of activity promote continuous violations of an association’s governing documents, but it presents privacy and security issues as well. 

While it is typical for the governing documents to contain prohibitions on short-term rentals, they governing documents may not be adequate enough to prevent the savvy owner from taking advantage of potential ambiguities.  For example, if an owner can obtain a one-year lease from a short-term renter that provides for early termination with no penalty, the owner is then able to provide a valid lease agreement to the association, effectively providing a short-term lease disguised as a long-term lease.  Some associations have started to actively monitor these rental sites.  However, unless the governing documents specifically restrict owners from advertising his or her property as a rental, the association likely has no way to enforce a broad restriction on short-term leasing, until the property has actually been leased to a renter on a short-term basis.

To combat these issues, associations should review their governing documents and consider amending to include specific provisions restricting short-term vacation rental transactions, such as limiting how often an owner can rent his or her property during a given year, and possibly denying access to amenities.  Additionally, associations can strengthen their enforcement provisions to discourage owners from violating short-term leasing restrictions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Shumaker, Loop & Kendrick, LLP

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