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I live in a 35 year old neighborhood in a suburb of a very popular tourist city. The neighborhood is secluded, and quiet and for the most part retirees live here. All are owner occupied. There were original covenants, but no HOA.
The houses sale prices are averaging about $400k. Most houses are very well maintained. Someone just found out that a house on my street, which did need some TLC, was quietly bought in December for $222k, some repairs were done, and now it is being advertised on Airbnb as a STR for up to 14 people.
This does not sit well with anyone. It could be perfectly legal, or not. Where do we begin?
1. Read your covenants.
Is there anything in them to give you leverage?
2. Do your covenants have provisions to allow the community to form an HOA with some community jurisdiction?
Do your state laws permit formation of an HOA?
3. Check with your city.
Are there regulations on rentals? If so, learn them thoroughly.
4. Are there any regulations limiting the number of tenants?
How about parking regulations, assuming there will be numerous vehicles for 14 people.
5. Check your noise ordinances, if any.
Don't let tenants violate noise ordinances without reporting them.
6. Don't be shy about engaging an attorney for assistance with any of these topics.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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First check the covenants, they may not prohibit this, and may even have been written before there were any. Without an HOA you would have to go to court to enforce the covenants, if any, they are not like city law. An HOA can fine homeowners and eventually put a lien on the property if not paid. There may also be some city regulations, usually that is on their website. Beyond that it just means being aware and call the police if anything there like a big party gets enough out of hand that some law is being broken.
If I were an investor and planned to offer a short-term rental, the very first thing I would do would be to check out my local zoning regulations, followed by my HOA requirements. No HOA, even better from the STR point of view. Over the past few years we have seen existing HOAs ban STR and with the blessing of the State. I get why the neighbors are up in arms, no one wants a party house on their block. But I would be equally upset if I purchased a home with the idea of a STR, only to have the HOA remove that possibility on a property I owned.
Or, you could have the same miserable misfortune my HOA has and that of my prior HOA. My prior HOA did not properly annex in the section we lived in and the courts declared it unencumbered by HOA rules. The one I live in now has been deemed to have zero power, in fining and enforcement. We can only enforce ACC regulations upon transfer of ownership, with the issuance of the resale package.
I'd be looking especially at zoning. AirBNBs are in fact unlicensed hotels, and some jurisdictions recognize that and confine them to the areas zoned for hotel and similar businesses; and some jurisdictions don't. Plus as always with city governments, it depends on the money and on whether they're overburdened with other enforcement matters.
Thanks for all the good suggestions. I emailed the city’s code enforcement department yesterday, so we’ll see what they say.
As Smartmoney said, if I bought a house with the intention of renting it out, I would have made sure it was legal first.
Don't be so sure of that. There was an HGTV show several years ago about making your fortune with vacation rentals. We saw an influx then of completely unprepared people. Some of whom should have known better being in the real estate industry.
We got on the wagon early, at my insistence, and adopted some Zoning regulations for them (parking, capacity. etc.). My big push was to force them to collect the County Lodging Tax (the Town would get most of that).
I ended up having to an analysis showing how much revenue a minimum number of VRBOs would bring in, which is the whole point of having tourists, make them pay for Town expenses. That brought everyone around except one Council member. Turns out she was planning on turning some of her properties into VRBOs and didn't want to add the LT.
EDIT: I see you're in coastal Georgia. I would think your jurisdiction already has VRBO regulations in place.
Last edited by North Beach Person; 02-06-2024 at 05:31 AM..
They may be "legal," but many HOAs are stepping forward to prohibit them, and that also is "legal."
OP says he/she doesn't live under an HOA. I'd say most of us don't.
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