Managing short-term rentals: A guide for your HOA or community

What are short-term rentals?

In California, short-term rentals are generally treated as stays of 30 days or less, often through platforms like Airbnb or Vrbo. Managing short-term rentals requires owners to follow local laws, obtain permits when required, and meet expectations for guests. In California, rules for short-term rentals vary by city, with some areas allowing them freely and others imposing strict restrictions or bans.

For HOAs and community associations, short-term rentals may create added complexity. Guests can affect security, parking, and use of amenities such as community swimming pools, which is why many communities adopt HOA rules that address how rentals are allowed and monitored.

This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

Should we allow short-term rentals in our community?

Managing short-term rentals has both advantages and drawbacks. On the positive side, short-term rentals can bring income to owners and make the community more visible to visitors. On the negative side, they can increase wear and tear on shared areas, cause noise or parking disputes, and create a sense of instability if residents feel there is too much turnover.

Boards that are considering whether to allow or restrict short-term rentals should carefully review governing documents, consult with legal counsel, and consider feedback from residents. The goal is to balance owner rights with the long-term stability of the community.
 

Tips for short-term rental management

1. Review your governing documents. Many HOAs were formed before short-term rentals became popular. As a result, their governing documents do not include a policy about them. Determine how well your governing documents address short-term rentals (or if they address them at all) and whether they specify rental length terms. If your policy is lacking, raise the issue at your next board meeting.
    
2. Survey residents. Before proposing any changes to your governing documents, survey the attitudes and opinions of residents to see if there is a consensus about short-term rentals. A well-equipped community management company can provide guidance and communication resources. Changing governing documents requires positive votes from a large majority of the owners, and it is often difficult to reach the required quorum.
    
3. Know the local laws. Regulations regarding short-term rentals vary widely among cities and municipalities in California. For example, Ojai bans short-term rentals completely. In Anaheim, only short-term rentals with existing permits can keep operating, while new permits are no longer being issued. Some places, such as Laguna Beach, prohibit them in residential zones. Other areas require a business license. Many towns are still playing legal catch-up as the popularity of home-sharing websites increases. You should be familiar with current and pending California HOA laws. Keep in mind that if your HOA’s regulations are less stringent than those of your town, the town laws take precedence and the HOA’s rules may be unenforceable.
    
4. Educate residents. Use a variety of communication channels to remind residents about regulations and the consequences of illegal short-term rentals. Some ways to reach out to your residents include holding special meetings and leveraging communication resources from your community management company to send email blasts or letters, post articles in community newsletters, and make phone calls.
    
5. Conduct training sessions. Train board members, residents, and staff about community awareness and how to handle suspicious or unauthorized guests. You may want to turn to your community management company to conduct this training or to provide resources.
    
6. Empower staff to enforce the rules. Community staff should have the authority to forbid unauthorized guests from entering the community. Depending on how your regulations are written, guests might only be allowed to enter if the owner is present or if they have written authorization.
    
7. Look for violators online. Periodically check sites like Airbnb, Vrbo, and HomeAway to see if any homeowners in your community are listing their homes in violation of your HOA regulations. Your community manager can then notify the owners of their potential violations and resulting fines, and request removal of the listing.
    
8. Document violations. Keep detailed records of violations and the steps you have taken to address them. You may need this documentation if legal action becomes necessary.
    
9. Impose fines and penalties. If you discover any violations, impose a fine or penalty on the homeowner, as per your governing documents. Speak with your community management company and HOA attorney to determine if and when you need to take legal action. Above all, be consistent in how you enforce your short-term rental rules.

Frequently asked questions about short-term rentals

Are short-term rentals legal in all parts of California?

No, each city has its own rules. Some allow them broadly, others restrict them to primary residences, and some prohibit them entirely.
 

Can an HOA completely ban short-term rentals?

Yes, if the governing documents are properly amended and the process complies with California law, an HOA may be able to restrict or prohibit short-term rentals.
 

Do short-term rentals affect property values?

The impact varies. Some argue that short-term rentals increase demand, while others believe they make communities less attractive to long-term residents. Additionally, agencies such as Fannie Mae, Freddie Mac, and FHA limit the percentage of investor-owned units they will finance.
 

Who pays hotel or occupancy taxes on short-term rentals?

In most California cities, the owner of the rental is responsible for collecting and remitting transient occupancy taxes. Some platforms collect these automatically on behalf of hosts.
 

What happens if an owner violates HOA short-term rental restrictions?

The HOA may levy fines, suspend amenity privileges, or pursue legal enforcement depending on what the governing documents and applicable laws allow.

Love them or hate them, short-term rentals are here to stay. HOAs in California need to be prepared in order to reduce potential problems.

If you need help creating a short-term rental policy or enforcing your existing policy, contact FirstService Residential, California’s leading community management company.