Short-Term Rentals Not A CC&R’s-Prohibited ‘Business Activity’

Questions: We live in a nice Glendale neighborhood of 188 homes near the Cardinals stadium. At least twenty of these homes have become short-term rentals (“STRs”). Our CC&Rs require that any amendment to the CC&Rs must have the approval of 75% of the homeowners. We are not sure that we can get 75% approval of the homeowners, as many of the homeowners don’t seem to care about STRs. Our CC&Rs currently prohibit “operation of a business.” The STR homeowners in our neighborhood advertise on AirBnB/VRBO, manage the moving in and out of STRs, and collect rent from the STRs. Isn’t that the “operation of a business?” Do we even have to amend the CC&Rs to prohibit STRs? If we do have to amend the CC&Rs, how long will a STR amendment to our CC&Rs last?

Answer: Most courts have ruled that a homeowner who leases a home for any period of time, e.g., one year, six months, or less such as a STR, does not by itself violate a CC&R prohibiting “the operation of a business” in the community. Therefore, your CC&Rs will now probably have to be amended to prohibit STRs. Finally, this CC&R amendment prohibiting STRs should last until the CC&Rs are amended to allow STRs.