STATE SUPREME COURT RULING LIMITS HOA’S ABILITY TO ENFORCE SHORT TERM RENTAL RESTRICTIONS

This case involved a dispute between homeowners (“Owners”) and their homeowners association (“Association”) over Owners’ right to lease their property for short terms (less than 30 days).

Short-term rentals are one of the hottest, and most divisive, issues in community associations. Many Association boards assume that if the membership approves a CC&R amendment restricting short-term rentals such as “Airbnb” and “Vrbo,” the restriction automatically applies to every lot in the community, including future buyers. But the court in this case held that in some instances a recorded amendment that restricts short-term rentals may not be enforceable against certain properties within the community.

An Idaho state statute prohibits homeowners associations from adding, amending, or enforcing any covenant, condition or restrictions that limit or prohibit short-term property rentals without the express written consent of the property owner at the time the restriction is created. Association solicited written votes from its “then current” members on whether the CC&Rs should be amended to preclude short-term (less than 30 days) rentals. A majority of the members voted in favor of the amendment, but the owners of five properties, including the former owner of Owners’ property voted against it. Based on the majority vote, Association adopted the amendment which included the following language:

This restriction shall not limit or prohibit rental of any property of any owner of record as of the effective recording date of these amended CC&Rs unless expressly agreed to in writing by the owner at the time of the adoption of these amended CC&Rs.

After the adoption of the amendment, Owners’: