Rembaum’s Association Roundup: Florida’s Newest Non-Native Invasion – Overnight Rentals

With little doubt, purchasing a home is one of the most significant investments you can make. In order to help protect that investment, many purchasers choose to buy homes within community associations that include homeowners’, cooperative and condominium associations. Behavior within community associations is governed by a declaration of condominium or declaration of restrictions, along with the bylaws, articles of incorporation and, importantly, and more often than not, the rules and regulations generated by the board of directors. Those of us living within community associations, for the most part, did not sign up to live in a community with transient overnight housing. Yet, if left to the vices of VRBO and AirBnB that is exactly what can happen in your community. Do you know what to look for? Do you know how to prevent this from occurring? What if it is occurring in your neighborhood? What can your community association do about it?

For a variety of reasons, none which are the subject of today’s column, local governments may have difficulty in promulgating local ordinances prohibiting overnight housing offered by VRBO and AirBnB. Therefore, it is left up to your community association’s board of directors to ensure proper measures are in place to prevent homes in your community from becoming the newest unnamed hotel/motel.

At the end of the day, renting property for one night, or six months, should be subject to the covenants and conditions set out in the association’s declaration. In terms of more quickly regulating overnight transient housing, homeowners’ associations have many advantages over that of the condominium association in that there are many circumstances in which the homeowners’ association can adopt rules and regulations prohibiting the transient activity. That said, covenants set out in a declaration which have been adopted by the members have a much stronger presumption of validity and enforceability as compared against rules and regulations adopted by a board of directors. In fact, the condominium association has no choice but to include such prohibitions against transient housing in its declaration of condominium.

More specifically, section 718.110(13) of the Florida Statutes, governing condominium associations, provides, in relevant part, that:

“An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment.”

Therefore, if your condominium association does not have covenants already in place to protect against use of any of the condominium units as overnight housing for transient rental purposes, then a vote of the members will be necessary in order to adopt the necessary restrictive covenant(s) to insert into the association’s declaration of condominium to protect against such activity. In the long run, because provisions set out in the declaration of condominium have a greater presumption of validity, the condominium association stands a good chance of prevailing in the event a unit owner challenges the lease covenant. In fact, provisions of a declaration will not be invalidated absent a showing that they are wholly arbitrary in their application, are in violation of public policy, or that they abrogate some fundamental constitutional right.

Nevertheless, as to a homeowners’ association that does not have the necessary covenants set out in the homeowners’ association declaration of covenants to protect against transient housing, rather than having to take a vote of the members to amend its declaration, the board of directors, upon a 14 day board of directors meeting notice mailed to all of the members and posted in a conspicuous place in the community, is able to adopt rules and regulations governing the use of any home subjected to the declaration for transient housing. But, because the rules and regulations are adopted by the board and not adopted by the members of the entire community, then, upon a member’s legal challenge, the outcome is not as clear. Upon such a challenge, the court will analyze whether the board acted within its scope of authority, whether the board exhibited arbitrary or capricious decision-making, and whether the new rule contravenes either an express provision of the declaration or a right reasonably inferred therefrom. Therefore, at the first available opportunity, the membership of the homeowners’ association should be provided the opportunity to approve an amendment to the association’s declaration so that the leasing restrictions are set out in the associations’ declaration of restrictions.

When the association is considering adopting either a declaration amendment or new rule and regulation governing a prohibition against transient housing, the association should also consider at that time updating its entire owner/rental approval process to include prohibitions against purchasers and renters who have committed crimes of moral turpitude, have a history of significant financial irresponsibility, who lie on their sale/lease application, or who do not meet the other requirements such as length of tenancy (e.g., no rentals for less than six months and only one lease per year). These types of issues, and more, should be discussed with the association’s lawyer.

Importantly, the time has come for every community association to regularly monitor VRBO and AirBnB listings to see if homes in your community are being advertised for overnight rental purposes. If so, this should be brought to the attention of the association’s board of directors and manager.

Jeffrey Rembaum, Esq. of Kaye, Bender, Rembaum attorneys at law, legal practice consists of representation of condominium, homeowner, commercial and mobile home park associations, as well as exclusive country club communities and the developers who build them. He is a regular columnist for The Condo News, a biweekly publication and was inducted into the 2012, 2013 & 2014 Florida Super Lawyers. He can be reached at 561-241-4462.

Tags: Condo & HOA Law, Law & Legal, Management News