California Courts Unsympathetic to Association Homeowners Trying to Avoid Fees for Renting Out Property

Any California homeowner living in a community governed by a condo or homeowners association (HOA) and hoping to earn a little extra cash with short-term rentals should pay heed to a recent decision by the state’s Second Appellate District Court of Appeal, called Oak Shores Community Association v. Burlison. (Second Appellate District, March 24, 2015).

It concerns two absentee homeowners who regularly rented out their homes in Oak Shores — a private community by the shores of Lake Nacimiento, offering amenities such as boating, golf, a pool, a campground and more.

The owners refused to pay their HOA’s annual fee of $325 for owners who rent out homes. In fact, they refused to pay a number of other fees, adding up to over tens of thousands of dollars by the time they brought suit. Their suit also challenged an HOA rule that homeowners who rented out their homes could not do so for periods of less than seven days, a rule limiting the number of cars, boats and other watercraft that renters were allowed to bring in, and more.

Neither the trial court nor the appeals court saw any merit in the homeowners’ arguments, agreeing with Oak Shores that renters are tough on a property and add to the HOA’s expenses and problems. What problems are these, you might wonder? The court cited issues to do with parking, lack of awareness of the rules, noise and use, and abuse of the facilities, requiring greater supervision and increased administrative expenses.

HOA boards around California probably have their eyes on this decision. If rules restricting rentals aren’t already in their rules or bylaws, they may be adding them soon.