Leasing & Opccupancy

Practical Tips for Dealing with Short-term Rentals

Whether you love them or hate them, it appears as though short-term rentals, especially in the D.C. metropolitan area, are here to stay.  Below are some legal and practical tips for managers when faced with decisions or complaints relating to short-term rentals.

Look to see if the community associations’ recorded covenants prohibit short-term rentals.

The prohibition can come in various forms.  It can be something along the lines of “no short-term or transient use” language prohibiting renting a portion of the home, rather than the entire home, at a time.  You may wish to consult with legal counsel to make this determination.  If short-term rentals are prohibited, you may have luck contacting sites, such as Airbnb, directly to potentially pull the listing.

You may also have recourse with your municipality if a short-term rental license is required and violating the community associations’ restrictive covenants is a basis for revocation of the license.  For example, in Montgomery County, Maryland, beginning July 1, 2018, short-term rental providers will need to obtain a license from the County.  The County can revoke the short-term rental license if short-term rentals are prohibited in the community association’s governing documents or if association fees are more than 30 days past due.


The association may also have independent enforcement authority in its governing documents or by law, including fines, for violations of its prohibition on short-term rentals.

 

If short-term rentals are not a violation, you may wish to amend your governing documents to prohibit such use.
This is a determination that should be made by taking into consideration the specifics of your community association.  Condominiums should also take into consideration FHA condominium guidelines when deciding whether or not to amend, given the effect the amendment could have on FHA condominium approval.  Given that amending covenants is many times not easy, the board and manager should consider whether there are other mechanisms with which to regulate the negative effects of a short-term rental, instead of the short-term rental itself.  As discussed below, this may include the adoption of rules and regulations regarding noise and parking.

Review other issues/nuisances caused by short-term rentals in your community.
This is a good opportunity to review rules and regulations relating to noise, pool use, smoking, etc.  Even if you are unable to regulate or restrict the use itself, there may be other rules and regulations that relate to the actions about which the association is receiving complaints.  These may include parking rules, guest notification procedures, or surveillance measures. While short-term rental guests are less likely to know or comply with rules and regulations, having certain procedures in place may allow the community association to hold the owner liable for violations of those rules and regulations.

The board may also wish to review whether there is operative language in the governing documents allowing the association to assess the owner directly for any damage caused as a result of the short-term rental.  Given the different use of amenities by residents versus vacation-type guests, this may be an issue to consider further.

 

By Ruth O. Katz, ESQ.
Ruth is a community associations attorney at Lerch, Early & Brewer in Bethesda, MD. She serves on the Washington Metropolitan Chapter Community Associations Institute’s Board of Directors and is active on the Maryland Legislative Action Committee.  For her efforts, she has been named the “Public Advocate of the Year” and “Volunteer of the Year” by the Washington Metropolitan Chapter Community Associations Institute and a “Rising Star” by the Washington Metropolitan Chapter of Community Associations Institute and Maryland Super Lawyers.

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