The buzz surrounding “short-term rentals” has been ever increasing over the past year thanks, in part, to websites such as Airbnb, Homeaway.com or VRBO.com. Websites such as these provide a platform for condo owners to rent their units on a short-term basis (sometimes as short as one or two nights). The ease with which they bring landlords and tenants together, coupled with their high profit margins, has driven their popularity.

While converting condo units into profit centers without much effort may be alluring to unit owners; condo associations, boards and management companies do not share in the excitement. Short-term rentals present a plethora of challenges most condo associations are ill-prepared to manage.

Most associations do not possess adequate security, be it cameras or twenty-four hour security guards, to monitor the increased pedestrian traffic and activity. Safety and the security of association members are placed at increased risk with an upsurge in non-resident visitors and guests. Not to mention most associations lack the equipment and personnel (luggage cart, doormen, concierge, and maintenance staff) required to assist short-term visitors with their stay.

Concern among the community association industry about the negative impact of short-term rentals has forced boards to face this issue head on. What boards can and should do is unique to each association and largely dependent upon their governing documents.

Is short-term leasing already prohibited within your association’s declaration, bylaws, or rules and regulations? For most associations, the answer is yes. Most condominium declarations prohibit leasing for terms less than thirty days. Nonetheless, many unit owners unknowingly violate this provision.

Associations can protect their community from short-term rental pitfalls with a well-drafted provision.   Such a provision may include a minimum lease term, penalties and fines for non-compliance, and imposition of association legal fees against the violating unit owner.

Part of a board member’s fiduciary responsibility requires safeguarding property value and protecting the safety of association members at large. With the increase in short-term rentals nationwide, it is critical for condo association boards to proactively address this issue.

If you serve on a board of directors for a community association, it is important that you immediately take the following three steps: 1) Review your association’s governing documents to confirm they contain a provision prohibiting short-term rentals; 2) Implement a policy to effectively enforce and communicate such provision; 3) Consult with an experienced attorney to review your documents to ensure the provision and policy is appropriately enforced.

Thoughtfully drafted and consistently enforced short-term rental policies will enable condo associations to win the short-term rental battle.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

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