COURT ORDERS SHORT TERM RENTAL RESTRICTION THAT CONFLICTED WITH RIGHTS GRANTED IN DECLARATION WAS VOID AND UNENFORCEABLE

This case involved a dispute between a group of homeowners (“Owners”) and their homeowners association (“Association”) over the rights of all owners of properties within the community to rent their properties for short terms. Per Association’s Declaration, each owner had the right to rent their property.

In 2022, Association’s Board of Directors proposed an amendment to the Association’s Bylaws that would: (i) limit the number of short-term rentals to 10 per year; and (ii) require Association members to enroll in a program before they could offer their properties for short-term rentals and to pay annual fees while enrolled in the program. Association’s Board of Directors approved the proposed amendment and presented it to the membership for a vote, which was to be conducted online, or by paper ballots that were mailed to the members. During the period for voting on the proposed amendment, Owners filed a civil action against Association and various officers and directors seeking to prevent the passage of the proposed amendment to Association’s Bylaws.

With their complaint, Owners sought a preliminary injunction to stop the vote on the proposed amendment and maintain the status quo pending the outcome of the litigation. The trial court denied Owners’ request for a preliminary injunction on the basis that Owners failed to show that the injunction was necessary to prevent immediate and irreparable harm that could not be adequately compensated by damages. Thereafter, Association’s Board of Directors declared: