Does HOA allow Airbnb? This question comes up often for homeowners who are considering renting their property. Short-term rentals are popular with travelers and can be a way for homeowners to earn money. But living in an HOA community means there are rules to follow. Understanding what those rules are is essential before creating a listing online.
Does HOA Allow Airbnb?
Every HOA has rules that tell residents what they can and cannot do. These rules are meant to protect the value of the homes and maintain the character of the neighborhood. They cover things like landscaping, exterior changes, and even pets. Rentals are no different.
When it comes to short-term rentals, most associations do not favor them. They see them as a risk to the community’s safety and peace. Residents often worry about noise, parking, and constant turnover. Because of this, boards take steps to limit or regulate Airbnb activity.
So, does HOA allow Airbnb? It depends on two things: state laws and the governing documents.
Check State Laws
State laws play an important role in deciding whether an HOA can restrict or ban short-term rentals. Some states give HOAs strong powers, while others set limits on what associations can do.
In Illinois, there are currently no laws that prevent HOAs or condo associations from prohibiting short-term rentals. That said, 765 ILCS 160/1-20 of the Illinois Common Interest Community Association Act requires HOAs that wish to restrict leasing to amend their governing documents to reflect such restrictions.
Check Governing Documents
Homeowners and board members must also check the governing documents. Associations may already have rental restrictions in place, as per their CC&Rs or bylaws. For example, they may ban rentals under 30 days or require board approval for any lease.
Can HOA Ban Short-Term Rentals?
The answer is usually yes if the restriction is clearly written into the governing documents. Courts tend to uphold these restrictions when challenged. Associations often argue that these limitations protect the community from problems linked to transient guests.
In Illinois, this is common in condominium associations. Many condo boards have amended their documents to stop or limit short-term rentals. Once the amendment passes by the required vote of the membership, the restriction becomes valid and enforceable. Homeowners who violate this rule can face fines or even legal action.
Can an HOA Stop You from Renting?
Associations have the right to regulate leasing as long as the rules are in the documents and follow state law. In general, associations are usually more open to long-term rentals than short-term ones. Here are reasons why:
- Stability. Long-term tenants are more invested in the community. They build relationships with neighbors and take better care of the property.
- Lower Turnover. Short-term rentals mean new people come and go every week. This constant change can make neighbors uneasy.
- Safety Concerns. Frequent guests are strangers to the community. Residents may feel less safe when they don’t recognize who is coming and going.
- Noise and Parking Issues. Short-term guests may not respect community rules. Parties, extra cars, and crowded streets are common complaints.
- Insurance Risks. Insurance providers often raise premiums when there are too many short-term rentals. This is because of the higher risk of damage or liability.
Sample HOA Short Term Rental Restrictions
Associations may take different approaches when dealing with Airbnb and similar platforms. Condo communities may have one set of rules, while single-family HOAs may have another. The exact restrictions depend on what the community wants and what the documents allow.
That said, here are some of the most common types of restrictions.
1. Complete Ban
Some associations choose to ban short-term rentals completely. This means no owner can lease their home for less than a certain number of days, such as 30 or 90. The purpose of a full ban is to keep the neighborhood stable. It reduces the risk of parties, traffic, and strangers constantly entering the community.
Boards that adopt a complete ban usually argue that it protects property values and preserves the original character of the neighborhood. Homeowners who want to rent under these rules typically have no choice but to lease long-term or not lease at all.
2. Rental Caps
Instead of banning rentals outright, an HOA may set a cap. For example, no more than 10% of homes in the community can be rented at the same time. This prevents investor ownership from getting too high.
Caps are designed to balance owner-occupied homes with rental properties. They also make it easier for buyers to get mortgages because lenders often refuse loans in communities with too many rentals. A cap system allows some homeowners to rent while keeping the overall ratio in favor of owner-occupants.
3. Registration Requirement
An HOA may require homeowners to register their rental before leasing. This lets the board track how many rentals exist and enforce rules. Registration often includes providing the names of tenants, contact information, and emergency details.
In some communities, owners must also submit copies of their lease agreements to the HOA office. Registration gives the board a way to respond quickly if problems arise with a renter. Without it, the HOA may not even know a unit is being used for short-term rental.
4. Tenant Screening Requirement
Some associations require screening of tenants. This can include background checks or credit checks. The goal is to make sure renters do not pose a risk to the community.
Screening rules can vary from one association to another. Some only require the owner to certify that screening has been done, while others want the results submitted to the board.
While screening may seem strict, many associations adopt it after problems with renters who caused damage or broke community rules. Screening creates an added layer of protection for both the HOA and the neighbors.
5. Lease Agreement Requirement
Associations may require a written lease agreement. The lease must include certain language, like a promise to follow HOA rules. This makes it easier for the HOA to hold renters accountable. For example, if a renter breaks noise restrictions, the HOA can point to the lease agreement as proof that the renter agreed to comply.
Many associations even provide template lease agreements that owners must use. These agreements usually cover rule compliance, access to amenities, and liability. A lease agreement requirement also helps the HOA prove in court that community restrictions bound the renter.
Will My HOA Allow Airbnb?
Many homeowners wonder if they can change the rules if their HOA doesn’t currently allow Airbnb rentals. The answer is yes, but it requires effort. To change rental restrictions, the community usually needs to amend the declaration or bylaws. This means a vote from the membership.
Homeowners can voice their concerns to their board by submitting formal letters or raising them at open meetings. If enough homeowners wish to change the rules, the association board may make a move to do so.
Of course, there is no guarantee that the attempt will be successful. If more owners value stability, the vote to amend the rules may not pass. Additionally, board members have a fiduciary duty to act within the association’s best interest. If that means keeping short-term rentals out, then owners must follow.
Does HOA Allow Airbnb? Answered!
State laws and the governing documents dictate whether or not HOAs and condo communities can prohibit short-term rentals. More often than not, associations do have this power. That said, it is vital to balance rental restrictions with the satisfaction of residents. Flexibility is important, but so is maintaining the character and property values of the community.
Hillcrest offers HOA management services to communities in Chicago. Call us today at 630-627-3303 or contact us online to request a proposal!
RELATED ARTICLES:
- HOA And Renters Rights In Chicago: A Smooth Relationship
- Who Pays HOA Renter Or Owner? HOA Dues Payment Rules For Renters
- How To Amend HOA Bylaws And Covenants In Chicago
