Short-Term Condo Rentals Were Residential Businesses

May 18, 2017
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Short-term condo rentals can help members in an association bring in extra cash. This is especially true when a condo is located in a vacation hotspot, like beach or winter sport towns. But short-term condo rentals have been argued over by many associations and members, with associations that are displeased with rentals claiming that they are a business that violates the covenants.

A recent court case dealt with that issue. There, an association notified some of its members who were renting their units to vacationers that this was in breach of the restrictive covenants because they were essentially running a business out of their units. The members refused to stop renting their units. The association sued the renters. A Florida trial court ruled in favor of the members. The association appealed.

The appeals court upheld the trial court’s decision. The appeals court concluded that the short-term vacation rentals were residential uses—and not business uses—because the renters were using the properties for residential purposes. The appeals court noted that the owners’ use of their properties as short-term vacation rentals didn’t violate the covenants restricting the properties’ use to residential purposes only and prohibiting their use for business purposes, because there was no allegation that the renters were using the properties for anything other than “ordinary living purposes” [Santa Monica Beach Prop. Owners Ass’n v. Acord, April 2017].