Several of my friends and I want to lease our homes during major upcoming events in Atlanta. I understand that the homeowner’s association we live in may not permit this. Should I ask for permission from the board or go ahead and advertise my home for lease online? Also, what happens if the association catches me leasing? Would this be enforceable in court? Jill T., Atlanta
Atlanta hosts many major events and many homeowners consider renting their homes in hope of huge gains during these times.
As with many questions pertaining to short term leasing, the answer is, “It depends.”
The answer depends on three primary factors:
1) Do the current covenants have any rental restrictions?
2) What do the covenants say about amendments?
3) Where is your house located?
What to Consider
First of all, it is important to know that properly adopted covenants are enforceable restrictions on the rights of property owners. If the covenants clearly restrict the type of rental you are wanting to do, and that rental restriction was in the covenants at the time you bought your home, then the HOA management team can most likely prevent you from renting. Examples include common terms prohibiting tenancies of less than six months or a year, or prohibiting leasing for a term of less than 30 days. Before you sign any agreement, be sure to check your community’s governing documents to find out if the association allows leasing of any kind.
Remember, unlike zoning laws or local ordinances, CC&Rs are enforced by the HOA management team or coop board, which may impose fines on violators and place liens on the property to collect them.
The Rise of Short-Term Rentals
Since the proliferation of Airbnb, and other such internet sites, many associations have amended their governing documents to ban rentals shorter than one year, and often go even further to explicitly ban short-term rentals. Short-term rentals may be inconsistent with the “residential usage” requirement in the typical HOA CC&Rs. Such rentals are more akin to private hotels than normal residential uses.
Upon examining the HOA covenants, if the HOA is subject to the POA Act, and if there are any restrictions to leasing, you need to understand that the HOA has the power to enforce those restrictions. Depending on how the covenants are drafted, the HOA management team may have the power to fine you or disallow your voting privileges.
Further, many cities and counties have taken action against the proliferation of short-term rentals in their communities. The growth of online home rental platforms has raised many questions about liability, insurance obligations, and the importance of maintaining neighborhood character. But the short-term rental market shows no signs of declining. Nearly one out of three travelers in the country stayed in short-term rental units in 2015. Airbnb stated that almost 7,000 Georgia residents offered their homes for short-term rental purposes in 2017. In Sandy Springs alone, over 200 units were available for rent through Airbnb.
The Bottom Line
At the end of the day, it’s your responsibility to take precautions and do your research before leasing your home. Since the HOA’s covenants are recorded documents, trying to use the excuse “I didn’t know” after the fact is not likely to help. This is just one more step in performing your due diligence and saving yourself trouble in the process.