Beaumont Tashjian Law Blog

Monday, April 9, 2018

The Tide of Short-Term Rental Policy: What Boards of Beach Communities Should Know

By: A.J. Jahanian, Esq.

Over the past few years, board members and management alike have had to deal with the challenges of the “sharing economy.” Sites such as Airbnb and VRBO have connected members of common interest developments to outside, non-member renters, in an unprecedented fashion, leading to the “commercialization” of residential communities. Boards and management are increasingly pressed with the issue of regulating short-term rentals and protecting their communities against excess use and nuisances, such as noise and increased traffic, associated with transient tenancy.

Complicating matters, the Court in Greenfield et al. v. Mandalay Shores Community Association has added another wrinkle that may limit a board’s ability to regulate short-term rentals/transient tenancy. In Greenfield, the plaintiffs owned a single-family home in the Mandalay Shores beach community, which they began renting to others for rental periods of less than thirty (30) days. Thereafter, the association adopted a resolution barring the rental of homes for less than 30 days, and any violations would result in significant fines. The plaintiffs then sued to enjoin (i.e., stop) the association’s proposed ban on short term rentals.

Under the California Coastal Act, the State’s goal was to “[m]aximize public access to and along the coast.” (Public Resources Code Section 30001.5.) In light of the Act, the Court in Greenfield held that banning short-term rentals in a coastal zone, as the community was located, was a violation of the Coastal Act, because it changed the intensity of use of coastal land. In other words, if the association is located in a coastal zone, short-term rental bans may be a violation of the Coastal Act.

Ultimately, boards and management should be proactive in addressing possible challenges to short-term rental bans by homeowners. First, determine if your community is zoned as a beach community, pursuant to local law and the California Coastal Commission. If it is, an outright ban on short-term rentals may violate the Coastal Act. However, as with all complicated legal issues, you should contact legal counsel for guidance. Local laws vary from city to city and boards and management should be prepared to lawfully protect their communities from transiency and other issues, with clarity and confidence.

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