LIMITED RESIDENTIAL LODGING (e.g. Airbnb) - IS IT ALLOWED IN YOUR ASSOCIATION?

By: Lindsey Flaherty

What exactly is limited residential lodging?  It is, in essence, renting of rooms or entire homes or condo units for short term occupancy i.e. less than 30 days. Airbnb   provides a searchable online marketplace that enables homeowners to list for rent all or a portion of their homes and prospective customers can choose to rent from one night to several months.  While this type of rental may present a great economic opportunity for some homeowners it causes increased traffic and parking issues in associations and has resulted in excessive noise and damage to common areas.  Essentially the problem seems to be that homeowners who choose to participate in it are introducing a business in to residential neighborhoods. This business involves providing lodging to transient people who are primarily on vacation.

Limited residential lodging has now garnered the attention of the Virginia Legislature with the introduction of Senate Bill 416 in the 2016 session which would create Chapter 13.4 the Limited Residential Lodging Act. This new statute would allow a homeowner to rent out all or part of his primary residence for periods of less than 30 consecutive days on his own or do so through a hosting platform like Airbnb.  Localities will be preempted from adopting ordinances or zoning restriction prohibiting such short-term rentals, but will be able to regulate them to a reasonable degree.  The bill is currently being discussed by an active working group of the Virginia Housing Commission which includes representatives from all relevant interest groups including those who are looking after the interests of common interest communities. 

While the draft Senate bill limits a locality’s ability to regulate the operation of an Airbnb-like service it does not limit the powers of a condominium or homeowner’s association to do so.  Associations can restrict or prevent this type of short term lodging through careful wording in their recorded documents and/or by amendment. Many associations already have such language in their governing documents. In order to be enforceable against a short-term rental the language needs to clearly prohibit short term rentals. Typically association documents have a six month or one year minimum term. The language would also need to prohibit a homeowner from renting anything less than his entire unit or home.  An association can also take additional steps by requiring unit owners to register their guests/tenants and their vehicles with the association.    

Condominium associations need to be especially vigilant because short term rentals of less than thirty (30) days are also prohibited by the Federal Housing Administration (FHA) and the Federal National Mortgage Association (Fannie Mae).