Short term rentals are becoming more and more popular, especially in Arizona. Pursuant to ARS 33-1260.01(A) / 33-1806.01(A), “A member may use the member’s property as a rental property unless prohibited in the declaration and shall use it in accordance with the declaration’s rental time period restrictions.”
If your community association’s declaration does not prohibit rentals or place any time period restrictions on rentals, are you at the complete mercy of any/all types of rental uses? Not necessarily!
In 2019, the Arizona Legislature adopted HB2672, which expanded upon the areas where a City or Town could impose limitations on short term rentals, including authorizing a City or Town to prohibit non-residential uses including for special events or for a retail, restaurant, banquet space, event center or other similar use. HB2672 also requires the owner of a short-term rental property provide the city or town and the county, with contact information for the owner or owner’s designee who is responsible for responding to complaints in a timely manner before offering to rent the property. As such, if a short-term rental within your community is being used for a non-residential purpose, the Board can report that property to your local City or Town code enforcement.
Furthermore, a non-residential use of a rental can potentially be restricted pursuant to the declaration. Many declarations include prohibitions against commercial or non-residential uses. A recent case in Texas (Sides v. Saliga, No. 03-17-00732-CV (Tex. App. Jun. 20, 2019)) found that a property subject to a declaration, which included a prohibition against commercial use, was in violation of the declaration by using the property as an event venue (including renting the property as a wedding venue). In Sides, the owner advertised having an on-site manager, a professional chef, advertised the property to the general public for event rental and invited the general public to the vendor showcase events. The Court ultimately found that the owner’s use of the property constituted a commercial use. As such, if a rental within your community is being used for a commercial or non-residential purpose, the Board can potentially pursue enforcement pursuant to the declaration.
Finally, please keep in mind that renters are also otherwise required to comply with all relevant use restrictions within the governing documents, including, but not limited to, nuisance provisions (e.g. loud parties), maintenance provisions and parking provisions. While short term rentals are becoming more popular and more difficult for community associations to prohibit and restrict, their authority is not unfettered.