Short Term Rentals HOA Dispute

This case involved a dispute between a planned community association member (“Owner”) and his homeowners association (“Association”) over the validity of an amendment to Association’s declaration that sought to prohibit rentals that were for less than 90 days (short-term rentals). Prior to the adoption of the amendment, Association’s declaration did not limit property rentals.

At some point in time following the purchase of his property in the community in late 1990s, and before Association’s adoption of an amendment to its declaration, Owner began using his residence as a short-term rental on multiple occasions. In 2014, Association sought to amend its declaration to prohibit short-term rentals and impose fines for violations of the prohibition.

Section 8.3 of Association’s declaration permitted an amendment of the declaration by “an instrument in writing, executed and acknowledged by the then Lot owners of not less than sixty-seven percent (67%) of the Lots in the Project.” Association circulated the proposed amendment to its members and received written consent forms signed, but not notarized or acknowledged, from 43 of the 63 Association members. Acting on said consents, Association deemed the amendment restricting short-term rentals adopted.

Following Association’s adoption of the amendment, Owner continued to rent his residence out for short-term rentals and ignored Association’s demands that he discontinue the rentals. Association then filed suit against Owner based on his violations of the short-term rental restriction and sought an injunction preventing future violations and damages for unpaid fines, as well as costs and attorney’s fees.

In his defense of the lawsuit, Owner contended that the amendment prohibiting short-term rentals was invalid because it had not been properly adopted by Association. Specifically, Owner contended: