What happens when your neighbors change every week?
November 3, 2015
Meriam-Webster defines a “neighbor” as a “person who lives next to or near another person.” Most of the time our neighbors are familiar. What happens when that neighbor changes on a monthly or even a weekly basis? This is a question that homeowners and condominium associations are having to answer more and more frequently. With the emergence of websites such as VRBO and Airbnb, transient or short-term leasing is becoming a more prevalent issue and concern. This is a rather novel problem that more associations are having to tackle every day. Given the safety issues involved with having strangers move in and out of a community on a weekly basis, it is apparent why so many associations want to prevent this type of activity. The question remains, what can an association do to prevent this type of short-term leasing?
There are several ways an association can prevent its members from leasing their property on such a short-term nature. The first, and most obvious, way is to expressly prevent this type of leasing in the form of a restrictive covenant. Courts around this country have held that a restrictive covenant will be enforced if it is clear. For example, if the association’s governing documents expressly prohibit leases of less than one-year in length, that restrictive covenant would likely be found valid and any leases less than one year would, in turn, be found to be in violation of the documents.
The more difficult question is how can an association prevent this type of leasing if your documents do not expressly prohibit short-term leasing. Aside from amending the documents, most associations may have a number of weapons to combat this growing concern.
The overwhelming majority of association documents contain a nuisance provision. Black’s Law Dictionary defines a “nuisance” as “[a] condition, activity, or situation that interferes with the use or enjoyment of property.” One could argue that having strangers move in nearby for a weekend interferes with the peaceful use and enjoyment of property. Courts have not yet addressed the issue of whether short-term leasing constitutes a nuisance.
Another potential way to attack this problem is to utilize the provision in the documents that address activities that may affect insurance rates or premiums for the association. This provision is most often found in condominium associations as opposed to residential homeowners’ associations. Most condominium associations have a provision in their governing documents that prohibit any activity that may adversely affect the association’s insurance rates. It is very likely that leasing property on a transient basis would increase the association’s insurance rates or premiums due to the increased activity level that often accompanies VRBO or Airbnb type leasing.
Based on increased popularity of VRBO, Airbnb, and similar sites, associations have just begun to deal with this issue. It appears to be a problem that associations can expect to address repeatedly in the near future, if they have not already begun to do so. Best practices would be to include a provision in the governing document that clearly and expressly prohibits transient or short-term leasing. If your documents do not currently prohibit this, it would be prudent to begin to take the necessary steps to have your documents amended accordingly. Addressing the problem before it begins is always better than addressing the problem after it has occurred.
If you would like to discuss this issue, or any other issue related to homeowner or condominium associations, please feel free to contact us.
Tags: airbnb, association, board of directors, CCRs, condominium, condominium association, condominium unit, Declaration of Covenants Conditions and Restrictions, HOA, homeowner, homeowners association, lease, leasing, Master Deed, non-profit corporation, prohibition, protective covenants, Tennessee, Tennessee Condominium Act, tn, unit, vrbo