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How could an homeowners’ association thwart your desire for a short-term rental?

by | Jul 6, 2020 | Real Estate Practice

Short-term rentals that last anywhere from a single night to a few weeks are more lucrative than long-term rentals. Platforms like Air BnB have made it easier than ever before for real estate investors to capitalize on premium properties by making them accessible to those who will pay premium rental prices. Acre of Pittsburgh’s July, 2020 main speaker is presenting on short term rentals for maximum profit.

Unfortunately, if the property you have an interest in purchasing or that you have already purchased is  in a planned community, condominium or cooperative, and part of  a homeowner’s association (HOA), and therefore, subject to certain rules, you could find yourself running afoul of HOA regulations by engaging in a short-term rental agreement. How do HOAs try to prevent short-term renting?

HOAs limit guests and require paperwork for overight visitors

In order to ensure that there aren’t a bunch of strange people coming in and out of the community, the HOA may require that residents provide formal documentation for any overnight guests. They may also limit how many guests you can have at one time or within a certain amount of time, such as no more than 5 overnight guests in one month. Additionally, they could limit the number of nights that any one guest can spend at your property in one year, often to fewer than 30.

The HOA may require a minimum rental term

In order to minimize traffic and new faces, many HOAs choose to require that rental agreements for properties within the HOA last for at least a month, and some for at least a year. Other associations have governing documents which limit or prevent any rentals. Obviously, even a month-to-month lease reduces the profit margins available for short-term rentals and precludes all but the most serious of vacationers from considering a property.

If your HOA agreement does not limit rentals or the length of time people can stay, require paperwork on visitors or set a minimum for rental periods, you may be able to successfully run an Air BnB despite having invested in a property within an HOA. You still need to check local government ordinances which restrict short term rentals by zoning and other means throughout the municipality.