One of the most frequent questions we have been asked over the past couple years is whether an Arizona homeowners’ association can prohibit short-term rentals. As is often the case with legal questions, the answer is “it depends.”
The general answer is that an Arizona HOA can prohibit short-term rentals within the community if the governing CC&Rs include valid rental restrictions. Absent such restrictions in the CC&Rs, any prohibition against short term rentals would need to be added by amendment and, in many cases, amendments purporting to add restrictions against short-term rentals may be invalid.
It's important to note that Arizona state law and local city ordinances may also impact the use of a property as a short-term rental. These laws may supersede any rules or regulations put in place by an HOA. It's always a good idea for homeowners to check with an attorney about the legality of using a home for short-term rentals and/or challenging an HOA’s efforts to restrict such use.
Why Do HOAs Prohibit Short-Term Rentals?
There are several reasons why a homeowners association (HOA) might choose to prohibit short-term rentals within the community. Some of the reasons include:
Noise and disturbance: Short-term rentals can often attract more people and activity than a long-term rental, which can lead to increased noise and disturbance for neighbors.
Lack of familiarity: Short-term renters may not be as familiar with the community's rules and regulations, which can lead to a higher risk of problems.
Decreased sense of community: Short-term rentals may not foster the same sense of community that long-term rentals do, as renters may not be as invested in the community.
Decreased property values: Some homeowners may be concerned that short-term rentals could lead to a decrease in property values, as they may not be as desirable to long-term buyers.
Increased wear and tear: Short-term rentals may experience more wear and tear on the property due to a higher turnover of renters.
These are just a few of the reasons an HOA might offer in support of efforts to restrict short-term rentals. Some of these reasons may be valid and others are likely just unfounded fears. Others, such as the impact on property values, may be the opposite of the truth. Regardless of the reasons given, HOAs may not restrict short-term rentals absent some lawful restriction.
What limitations are there on an HOA's ability to enforce rental restrictions?
In addition to the lack of authority granted in the governing documents, there are several other limitations on a homeowners association's (HOA's) ability to enforce rental restrictions. These limitations may vary depending on the specific circumstances and the laws that apply in the community. Some of the possible limitations on an HOA's ability to enforce rental restrictions include:
State and local laws: Some states and cities have laws that regulate short-term rentals, and these laws may limit an HOA's ability to enforce rental restrictions. For example, an HOA may not be able to prohibit short-term rentals if state or local law allows them.
Fair housing laws: An HOA's rental restrictions must comply with fair housing laws, which prohibit discrimination on the basis of race, color, religion, national origin, sex, disability, and other protected characteristics. If an HOA's rental restrictions disproportionately affect certain protected groups, they may be considered discriminatory and be subject to legal challenges.
First Amendment rights: An HOA's rental restrictions may be subject to constitutional challenges if they are deemed to infringe on homeowners' First Amendment rights, such as their freedom of speech or association.
Due process rights: An HOA's enforcement of rental restrictions must be fair and reasonable, and it must follow due process procedures, such as providing notice and an opportunity to be heard, before imposing any penalties.
It's important to note that these are just a few of the possible limitations on an HOA's ability to enforce rental restrictions. It's always a good idea for homeowners to consult with an attorney if they have questions about their rights and obligations with respect to short-term rentals in their community.