Rules Prohibiting Short-Term Rentals Probably Enforceable

Question: We live in a Cave Creek community with CC&Rs that do not prohibit short-term rentals. Our HOA board of directors, however, recently amended our Rules and Regulations to prohibit short-term rentals of less than 30 days. Although our CC&Rs do not prohibit short-term rentals, our CC&Rs specifically state that the Rules and Regulations for our Cave Creek community are incorporated by reference. We live in this Cave Creek community, and we are delighted by this amendment to our Rules and Regulations. Other homeowners in our Cave Creek community, however, use their homes exclusively for short-term rentals. They oppose these Rules and Regulations, and have even passed out flyers in our community saying that short-term rentals can only be prohibited or limited by an amendment to the CC&Rs. Is the recent amendment to the Rules and Regulations prohibiting short-term rentals enforceable?

Answer: Probably. Under A.R.S. § 33-1806.01 any restriction on rentals of a home must be in the CC&Rs of the community. This statute does not say, however, that the CC&Rs cannot incorporate by reference Rules and Regulations. For example, most CC&Rs authorize the enactment and enforcement of Rules and Regulations that provide for specific architectural guidelines, including paint colors, parking, and setbacks, that are enforceable by the HOA. Therefore, the recent amendment to your community’s Rules and Regulations prohibiting short-term rentals is probably enforceable.

Note: The specific language in the CC&Rs and in the Rules and Regulations should be reviewed carefully.