Reader Questions - Short Term Rentals: Both Sides

Hello Mr. Richardson,

We have a guest house on our half acre lot that we have rented out (using a short-term rental service). We are always home in the main house when guests are present, therefore, there has never been any issue with noise or nuisances over the many times we have rented it out. It has been a nice source of income that has allowed us to pay our utilities, some college tuition for our children and HOA dues.

The HOA sent a letter to us stating that we were running a commercial business from our home which is forbidden. Is there anything that protects the ability of a homeowner to rent out a room or, in our case, a spare guest house short of changing our listing to a monthly only rental?

Thanks for any help on this!

K.A., San Diego

Dear Mr. Richardson,

Is it legal for one of the other owners in my association to use a unit as a short-term rental without input from the other owners? Privately it was discussed among those of us who vehemently oppose this callous disregard for our concerns. Is this owner acting within legal parameters?  Your input will be greatly appreciated.

Thank you. I anxiously await your reply.

L.H., South Pasadena

Dear K.A. and L.H.,

While you are on opposite sides of this issue, the basic response is the same. Short-term rentals are considered by many as a commercial and therefore non-residential use of the property. While many web-based companies offer convenient advertising of such rentals, it is closer to a hotel-type operation than a tenancy. An increasing number of cities have adopted ordinances regarding short-term rentals, treating them as business enterprises.

This subject goes to the heart of what it means to live in a common interest community. In common interest communities, a social compact is created by the recorded covenants in which the owners agree to share certain values and give up a certain level of independence in return for the many benefits of sharing ownership or control of the association with one’s neighbors.

The interests of owners wishing to rent out their residences for vacation-type rentals obviously clash with the interests of those who are concerned about the possible drawbacks of such rentals. While K.A., you have been fortunate to have a rental history which has apparently not impacted your neighbors in the least, the greater likelihood with most such rentals is that they can create an administrative burden for the association and more frequently result in tenants with a lower level of concern for their temporary neighbors.

Short-term rentals are still a rental, and all landlords are required by Civil Code 4740(d) to provide the association the tenants’ name and contact information prior to the rental. My assumption is that this statute is almost never honored by short-term rental landlords.

Many associations already have minimum rental terms in their governing documents, and almost all residential association CC&Rs restrictions limiting the use of properties to residential purposes.

In these days of crowd-based capitalism, associations and their members should decide (if municipal ordinances allow) whether short-term rentals will be allowed, and if so under what conditions. Rentals, short-term or otherwise, should not adversely affect neighbors.

Sincerely,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.