Post by High Priestess on Oct 15, 2015 11:45:32 GMT
Keith shared Oct 12 2015
Colorado Says: "Short Terms Rentals may not be Commercial Use of Property"
Colorado court of appeals ruled, in a case of HoA Vs. Homeowner, that
A blog article summarizing the decision is on the co hoa law blog:
www.cohoalaw.com/399742-print.html
In a recent decision [Houston v. Wilson Mesa Ranch Homeowners Association, Inc., 2015 WL 4760331 (D. Colo. August 13, 2015], the Colorado Court of
Appeals held that an association’s covenants stating that homes could
not be occupied or used for any commercial or business purpose did not
prohibit a homeowner from renting out his property for short-term
vacation rentals.
A homeowner in the community advertised and rented
his home for rent through the VRBO website. In response to the
homeowner’s actions, the association passed an amendment to its
‘administrative procedures’ prohibiting its members from renting out
their properties for a period of less than thirty days without prior
board approval and establishing a $500 fine for violations.
The Court found that a short-term rental constitutes a residential
and not commercial use of the property and found in favor of the
homeowner. However, had the covenants contained a specific prohibition
against short term rentals, it may have reached an opposite conclusion.
Additionally, the Court found that the ‘administrative procedure’
adopted by the association was improper as it was contrary to the terms
of the covenants. In other words, since the covenants did not prohibit
short term rentals, the association could not restrict rentals absent a
homeowner approved amendment to the covenants.
This case illustrates how caution needs to be
utilized before an association attempt to interpret its covenants too
broadly. The dispute could have been avoided had the covenants
specifically prohibited short term rentals.
Colorado Appeals Court full ruling:
www.cobar.org/opinions/opinion.cfm?opinionid=9892
OR bit.ly/1jtV1Fu
My 2 cents:
There are similarities in Colorado and California law. In addition, definitions of terms and words are generally the same throughout the country. This ruling should help HomeSharers in Colorado where their HoA's are trying to restrict their activity sharing their homes.
If these can apply to California, this will help many SF Home Sharers dealing with hostile HoA's.
The most interesting part for me is 'Colorado's determination that "short-term rental constitutes a residential and not commercial use of the property"
Peter
Thanks Keith. Three caveats: 1. Colorado state judgments are at best persuasive and not binding on CA courts. The good news is that this is a Court of Appeals decision, which increases its persuasive potential 2. In addition to restricting this judgment jurisdictionally, opponents to home sharing may also seek to restrict this decision contextually - i.e. only in the context of HOA rules and perhaps only when the terms are substantially the same or even identical. 3. HOAs that are anti-home sharing can just amend their rules to clearly prohibit home sharing. How difficult this will be will depend on the nature of the Association. For example, in a holiday resort area, the HOA is likely to welcome home sharing. Not so much in a gated, retirement community.
Colorado Says: "Short Terms Rentals may not be Commercial Use of Property"
Colorado court of appeals ruled, in a case of HoA Vs. Homeowner, that
A blog article summarizing the decision is on the co hoa law blog:
www.cohoalaw.com/399742-print.html
In a recent decision [Houston v. Wilson Mesa Ranch Homeowners Association, Inc., 2015 WL 4760331 (D. Colo. August 13, 2015], the Colorado Court of
Appeals held that an association’s covenants stating that homes could
not be occupied or used for any commercial or business purpose did not
prohibit a homeowner from renting out his property for short-term
vacation rentals.
A homeowner in the community advertised and rented
his home for rent through the VRBO website. In response to the
homeowner’s actions, the association passed an amendment to its
‘administrative procedures’ prohibiting its members from renting out
their properties for a period of less than thirty days without prior
board approval and establishing a $500 fine for violations.
The Court found that a short-term rental constitutes a residential
and not commercial use of the property and found in favor of the
homeowner. However, had the covenants contained a specific prohibition
against short term rentals, it may have reached an opposite conclusion.
Additionally, the Court found that the ‘administrative procedure’
adopted by the association was improper as it was contrary to the terms
of the covenants. In other words, since the covenants did not prohibit
short term rentals, the association could not restrict rentals absent a
homeowner approved amendment to the covenants.
This case illustrates how caution needs to be
utilized before an association attempt to interpret its covenants too
broadly. The dispute could have been avoided had the covenants
specifically prohibited short term rentals.
Colorado Appeals Court full ruling:
www.cobar.org/opinions/opinion.cfm?opinionid=9892
OR bit.ly/1jtV1Fu
My 2 cents:
There are similarities in Colorado and California law. In addition, definitions of terms and words are generally the same throughout the country. This ruling should help HomeSharers in Colorado where their HoA's are trying to restrict their activity sharing their homes.
If these can apply to California, this will help many SF Home Sharers dealing with hostile HoA's.
The most interesting part for me is 'Colorado's determination that "short-term rental constitutes a residential and not commercial use of the property"
Peter
Thanks Keith. Three caveats: 1. Colorado state judgments are at best persuasive and not binding on CA courts. The good news is that this is a Court of Appeals decision, which increases its persuasive potential 2. In addition to restricting this judgment jurisdictionally, opponents to home sharing may also seek to restrict this decision contextually - i.e. only in the context of HOA rules and perhaps only when the terms are substantially the same or even identical. 3. HOAs that are anti-home sharing can just amend their rules to clearly prohibit home sharing. How difficult this will be will depend on the nature of the Association. For example, in a holiday resort area, the HOA is likely to welcome home sharing. Not so much in a gated, retirement community.