A Short Term Rental Case Study

A Short Term Rental Case Study

To make a little extra money, the tenant listed the property on a couple of short-term rental websites. They even went so far as to give pool keys and parking passes to their paying “guests.” Neighbors first became aware of the situation when they noticed a variety of rental cars at the house. They reported it to the HOA who contacted the owner and demanded that the activity be stopped, and the tenant be evicted. 

The owners lease included sections related to short term rental or, more specifically, to the fact that the owner did not allow their properties to be used as short-term rentals. This meant the tenant was in violation of not only HOA policy but their very own lease. 

By the time the owner was made aware of the situation, they HOA had automatically fined them $1000 for every week the property was listed on a vacation website. And continued to fine them every week the tenant remained at the property. 

The owner took the property off the websites and began the tenant eviction process. But that process doesn’t happen in one day and when the tenants fought the eviction, it added even more time to the legal process. The HOA could see the tenant was still living in their community. The owner was frustrated that the HOA was continuing to fine. 

How were we able to resolve this very frustrating conflict?   

  • We drafted an e-mail that listed exactly what the owner was doing and their long-term plan for future residents.   
  • We prepared a file with certain public documents showing that the owners had pulled the property from the vacation sites and began the eviction.   
  • We also documented what the owner was doing to create an in-house process  to scan the most popular vacation sites for any of their properties.   
  • After the owners signed off on the e-mail and document, we had a conference call with a member of the HOA board and the HOA manager. We wanted to make sure that what we were doing was also checking all the boxes for the association.   
  • As soon as the call was over, we sent the e-mail to all involved parties and then updated the HOA manager weekly as to the status of the property.   

Eventually the legal process
concluded, and the tenant left. We then approached the board about waiving or reducing the fines. The board made the decision to waive all fines for 6 months. However, if the property had any fine inducing infractions during that 6 months, all short-term rental fines would be reinstated. The owner appreciated the board working with them and made sure all new tenants were fully aware of the financial burden they would incur if they violated any of the association rules. 

No matter the situation, communication must be our first step towards resolving any problem. Our goal at IHS is to get to the compliance complaints early enough that they don’t escalate to the fine status. But when they do, we make the simple choice to start that hard conversation so that we can create a better relationship between the owner and the association.

The Value of Assessments
The Market Changes