With the advent of the sharing economy and websites such as airbnb.com and vrbo.com, many people have considered renting their primary or second residences to supplement income or defray maintenance expenses. This practice can lead to disputes with neighbors and local governing authorities. While renting is typically a “property right” that inures to the owner of real estate, it can be limited by restrictive covenants, home owners association agreements, and/or local zoning ordinances.
Most modern subdivisions include “covenants, conditions, and restrictions,” or CCRs, that run with the land. CCRs often restrict an owners ability to rent the property or, in the alternative, set certain conditions that must be met before rental can occur. Similarly, some properties are part of a home owners association, or HOA. HOAs impose, by contract, certain restrictions on the use of member properties.
Local zoning ordinances may also restrict or prohibit renting of a residence. In some cases, the zoning ordinance will only allow rental as a “conditional use.” As the term implies, in these instances, rental is allowed so long as certain “conditions” are met. Establishing that a property meets the imposed conditions can be a complicated process that typically requires notice to surrounding property owners, interaction with local fire, building, and other authorities, and public meetings.
Renting prior to fully understanding restrictions that may apply to the property can lead to disputes and imposition of fines. We are often asked to assist homeowners to determine if they have the right to rent out their residence or to assist in the “conditional use” process. We would be happy to assist you in the event you are contemplating renting out your residence (or are already doing so).