The Sharing Economy Part 2: Reducing the Risks to Condo Associations and Residents
There seems to be no reason to believe that the sharing economy will slow down anytime soon. Airbnb, VRBO, HomeAway and other websites listing short-term rentals continue to boom as a result.
In Part One of our two-part series about short-term rentals, we discussed how the home-sharing trend is affecting condominium buildings across Alberta. In this article, we explain what your condo board can do to protect the interests of homeowners and your association.
Although short-term rentals may seem like a great idea for renters and homeowners alike, many condo boards are concerned about the risks. As a result, some have added rules about short-term rentals in their governing documents and have fined homeowners who list their units on home-sharing websites.
At the same time, other associations continue to work on amending their outdated governing documents. In some cases, they hope to impose bans on these types of rentals. If your condo association is planning to amend your bylaws, you should speak with your association attorney about the legal implications, as well as seek guidance from an experienced property management company.
Meanwhile, here are five recommendations that your condo board can follow to reduce the risks posed by short-term rentals in your building. These recommendations are based on an article written by Dan Wurtzel, president at FirstService Residential. (You can read the entire article by clicking here.)
- Become an expert on your condo’s governing documents.
You and the other board members should understand your community’s bylaws, policies, rules and regulations. Of particular importance with regard to home-sharing is anything regarding the leasing of individual units. If your bylaws do not address short-term rentals directly, or if your leasing policy seems confusing or vague, consult with your condominium’s lawyer to determine how you can make any changes.
- Monitor guests.
All guests should be accompanied by a unit owner or have written authorization from a managing agent in order to be on the premises. If the board becomes aware that an unauthorized short-term renter is already in the building, they should follow established protocols. (See No. 3.)
- Document unauthorized visitors and renters.
The board should gather as much information as possible about any guests they determine to be short-term renters. This may prove useful if you need to take legal action against a homeowner.
A management software tool provided by a property management company can make it easier to compile information about a guest. For instance, condo associations managed by FirstService Residential can use the company’s proprietary management software, FirstService Residential Connect. This allows the board to collect a full range of information about guests who enter the building, including their name, phone number, address, photo, resident they are visiting and the length of their stay. FirstService Residential Connect will also notify the management team when particular guests are onsite and when their visitation period is due to end.
- Provide education to staff and residents.
It is critical that staff members and residents receive proper training regarding condo awareness and best practices. This includes educating them about how to deal with unauthorized or suspicious guests. A good property management company can conduct this training and provide appropriate resources.
Your condo board should also communicate with residents about the potential risks and consequences of renting out their units on a short-term basis. Additionally, you should encourage residents to notify a member of the management team if they become aware that someone is engaged in home-sharing or if they notice any unauthorized visitors in the building.
One way to talk to residents about short-term rentals is by holding a special meeting about this topic. You can also communicate with residents by sending out an email or letter, posting information on a community website or in a newsletter or using a notification system like FirstService Residential’s Resident Alert.
Your condo board should also communicate with residents about the potential risks and consequences of renting out their units on a short-term basis. Additionally, you should encourage residents to notify a member of the management team if they become aware that someone is engaged in home-sharing or if they notice any unauthorized visitors in the building.
One way to talk to residents about short-term rentals is by holding a special meeting about this topic. You can also communicate with residents by sending out an email or letter, posting information on a community website or in a newsletter or using a notification system like FirstService Residential’s Resident Alert.
- Issue violation notices.
Any homeowner who violates your short-term rental policy should receive a violation notice promptly. Depending on the laws in your city and the language in your bylaws, impose appropriate fines and penalties. Be sure that your board is consistent in how it penalizes violators. If you need to take legal action against a homeowner, check with your attorney to see if related fees may also be charged back.
As home-sharing sites like Airbnb continue to grow, condominium associations will need to be vigilant about protecting the safety of the residents in their buildings and the value of their investments. Find out how a property management company can help. Contact FirstService Residential, Alberta’s leading property management company, today.