Beaumont Tashjian Law Blog

Monday, February 22, 2021

Court Holds that Short-Term Rentals are Not Considered an Unauthorized “Business Use” - By: A.J. Jahanian, Esq.

With Assembly Bill 3182 taking effect this past January, community association boards lost significant leeway to exercise their discretion and adopt/enforce rental restrictions. Though many rental restrictions, such as minimum lease term requirements, and “caps” on the total number of rentals within the community at a given time are intended to help maintain property values and minimize increases in insurance premiums, the State is nonetheless prioritizing expanding the pool of homes available to renters. Similarly, the Court in Lastavich v. Nob Hill Homeowners Association recently confirmed that short-term rentals are not considered an unauthorized commercial use of the home.

In this case, owners were using their condominium unit as a short-term vacation rental when a neighbor sued the association after becoming fed up with the increased foot traffic and alleged noise emanating from the unit and its various tenants. The disgruntled owner argued that the CC&Rs for the association prohibited the use of units as short-term vacation rentals, because they required each unit to be used only as a “single family residence”. 

The Court held that absent any express language prohibiting short-term vacation rentals or providing for a minimum lease term in the CC&Rs, the owners’ rental activities were in fact an authorized, single-family use of their condominium. In other words, boards cannot prohibit short-term rentals by classifying them as a “commercial use”.

Instead, This case demonstrates that it is critical for boards to work with legal counsel to update their governing documents and include allowable rental restrictions. The Lastavich case affirms what many other states have already decided, in that the use of a dwelling for short term rentals is in fact a residential purpose. However, boards still retain some discretion in implementing rules and restrictions to minimize the impact of rentals. 

For example, associations can still restrict short-term rentals by requiring a minimum lease term of thirty (30) days and imposing a rental cap that would limit the total number of rentals in the community to no less than twenty-five percent (25%). As a reminder, associations must comply with Assembly Bill 3182 and amend their governing documents to include these restrictions by no later than December 31, 2021. 



Archived Posts

2021
2020
December
November
October
September
August
July
May
April
March
February
January
2019
2018
2017
2016
December
November
October
August
July
June
May
April
March
February
January



© 2021 Beaumont Tashjian | Disclaimer
21650 Oxnard St., Suite 1620, Woodland Hills, CA 91367
| Phone: (866) 788-9998
23046 Avenida de la Carlota, Suite 580, Laguna Hills, CA 92653
| Phone: (866) 788-9998
402 N. Broadway, Suite 400, San Diego, CA 92101
| Phone: (866) 788-9998
1241 Johnson Avenue, Suite 341, San Luis Obispo, CA 93041
| Phone: (866) 788-9998
74-710 Highway 111, Suite 102, Palm Desert, CA 92260
| Phone: (866) 788-9998

General Legal Counsel | Litigation | Dispute Resolution | Governing Documents | Assessment Collection Services | | About Us | BT ACTS

Law Firm Website Design by
Amicus Creative


LOS ANGELES | ORANGE COUNTY | CENTRAL COAST | KERN COUNTY | INLAND EMPIRE
© Beaumont Tashjian | Disclaimer | Law Firm Website Design by Zola Creative