HOA’s and Short Term Vacation Rentals

You are on vacation at your favorite local vacation destination – Bend, Lake Chelan, Seaside, and think “boy I would like to have a vacation house.” Maybe you talk to a realtor, or (shudder) attend a time share presentation (hopefully you signed nothing), then the doubts creep in and you add up the monthly mortgage, insurance, taxes, Owner Association dues, and the myriad of other costs associated with owning a home, and think that maybe staying at a hotel or camping isn’t such a bad idea.

One option that many owners of vacation homes have turned to is short term rentals. Rent the house out for the times you won’t be there to cover your costs. Whether you use a traditional property manager, or online options like Craigslist, this is an option that may allow you to afford that vacation home.

Besides carefully considering your finances to ensure that you can afford it, a review of the CCR’s, Bylaws, and community’s Rules and Regulations is warranted.

Recent litigation involving rentals and attempts to restrict them shows that many of your new neighbors may not care for your second home being occupied by a new group of tenants each weekend.

Don’t stop reading the documents if you see no terms dealing with rentals. While the governing documents of some communities will contain a provision addressing rentals, others will have one that requires “residential use” and prohibits “commercial use.”

To date, Oregon and Washington courts have found that short term rentals are not “commercial use.” Courts have also been unfriendly to attempts to adopt restrictions prohibiting rentals. Whether that trend will continue is uncertain. However, a potential buyer should expect that newer communities will have more precisely drafted CCR’s, which would pass judicial muster, whereas older communities will attempt to explore options to restrict a practice that year round residents may consider disruptive.

 

This blog post is offered for general information and educational purposes only. It is not offered as legal advice and does not constitute legal advice or opinion. Although I intend to keep this information current, I do not promise or guarantee that the information is correct, complete, or up-to date. You should not act or reply upon the information in this post without seeking the advice of an attorney.

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