How to Mitigate the Impact of Short-Term Rentals in Your HOA Community

January 17, 2023   

A new Civil Code Section 4739 says that the HOA may not prohibit owners who live in their residences from renting a room to a tenant, although the HOA can limit the term of the rental to a period of 30 days or less. The impact of this new law is that members living in their HOA home can take on boarders (but not on a short-term basis, defined to mean 30 days or less). (source)

New Civil Code §4739 is a law that invalidates any association governing document provision that prohibits the rental of a “portion” of any separate interest lot or unit (typically a room) as long:

  • as the owner also occupies a portion of that lot or unit and
  • the association’s restriction (e.g., a CC&R provision) requires a minimum rental term longer than 30 days.

In other words, no owner can be prohibited from renting a room in their unit or lot, although they can be prohibited from renting it on a short-term basis. Thankfully, while it allows such rentals, it DOES NOT permit an owner or resident to violate any other provisions of the association’s governing documents. So let's take a closer look at how HOAs can mitigate community impacts through the rule-making process and how the board members can do this.

Developing Rules and Regulations

The most important step board members should take when dealing with short-term rentals is to develop rules and regulations that address common issues. These rules should be tailored to the specific needs of your HOA to ensure compliance and mitigate potential conflict due to short-term rental activities. Some examples include requiring all owners who intend to rent their units or lots for shorter periods to provide the board with a copy of the lease agreement, limiting the number of guests allowed per unit or lot, mandating quiet hours, requiring owners and their tenants to follow security protocols, etc. Clear rules will help reduce potential problems associated with short-term rentals in your community while also giving all residents unambiguous guidance for safe, enjoyable, and peaceful living.

Enforcing Rules Effectively

Board members must also be proactive about enforcing these rules so that renters know what to expect and owners understand that they are largely responsible for the conduct of their tenants. After all, enforcing the rules and restrictions is the board's fiduciary duty. In addition, enforcement mechanisms such as hearing rules and procedures and fine schedules should be established so everyone is on the same page. This will help owners also manage expectations with their tenants. These may also include disciplinary measures such as revoking common area access privileges. Board members should also keep an open dialogue with owners and renters so they can discuss any issues or concerns promptly, and effectively address them before they become major problems.

Creating Social Norms

Finally, it's important for board members to create social norms within the community around renting out units for short periods of time. This means providing positive reinforcement when residents show good behavior by following rules and regulations related to short-term rentals and actively engaging with owners and renters to foster good relationships between all parties involved. Doing this will help create an environment where everyone feels respected and responsible for maintaining harmony within the community regardless of whether they own or rent their home.

New Civil Code §clarifies an HOA’s rental restriction rights surrounding room rentals. Such rules should be enforced regularly to ensure compliance from both owners and renters alike, while also creating social norms within the community that promote respect and peace and quiet in the community. By taking these steps, board members can mitigate many potential issues associated with renting out units or lots while ensuring that everyone's rights are upheld within their HOA community.

reference: Whitney | Petchul 2023 Legislative Update (.pdf)

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