Condo Media - May 2018 - 21

The short-term rental of residential property is producing long-term concerns. Those concerns, which were just emerging when I wrote about this issue three years ago, have grown
exponentially as short-term vacation rentals have ballooned, creating what is now a $34 billion business and triggering an avalanche of conflicts and complaints to which the governing

A

boards of condominiums, municipal officials, and lawmakers are all beginning to respond.

At the federal level, a group of senators concerned about the issue have
asked the Federal Trade Commission
to investigate the impact short-term
rental companies are having on local
housing markets.
Closer to home, the Cambridge City
Council recently approved an ordinance
requiring condominium owners and
tenants who rent their units online to
register the property with the city, and to
obtain permission from their condominium association or landlord before doing
so. The ordinance also requires "hosts"
to live in the same building or a building
adjacent to the one in which they are offering a short-term rental unit.
The Boston City Council recently began its review of regulations sponsored
by Mayor Marty Walsh in January 2018
that provide guidelines for classification
of different types of short-term use, as
well as a varying annual fee structure
for short-term rentals.
Other communities have also been
eyeing regulations to deal with the business. The Massachusetts Department
of Health and Human Services has suggested that short-term rentals should
be regulated like bed and breakfasts.
LEGISLATIVE ACTION
The state legislature is being urged
to address short-term rentals by Gov.
Charlie Baker, who last year proposed
legislation that would impose a tax
on short-term rentals. Likewise, Rep.
Aaron Michlewitz, who chairs the Committee on Financial Services, is working
to refine a bill that would also tax rental
income and would also require owners

to obtain a state license and comply
with a number of health, safety, and
insurance requirements.
When he introduced a similar measure three years ago, Michlewitz said it
aimed to address both safety and health
concerns and the "unfair competition"
between hotels and bed and breakfasts,
which pay taxes on their revenue, and
homeowners, who aren't taxed on the
income from short-term rentals.
While hotels are concerned about the
impact on their business, condominium
owners are concerned about the impact
on their communities when residences
become hotel rooms and their neighbors become an ever-changing parade
of guests.
Security, wear and tear on common
area spaces and amenities, rowdy
behavior, and the vacation atmosphere
created by transient residents are the
major complaints. Not surprisingly,
these complaints have ended up in the
courts, which, also not surprisingly,
have differed in their responses.
COMMERCIAL OR
RESIDENTIAL USE?
The key legal question in most of these
disputes has been whether short-term
rentals represent residential or commercial use of residential property.
The Massachusetts Land Court
concluded in a recent decision (Robert
S. Lytle v. Alana Swiec, et. al.) that the
short-term rental of a summer cottage
in Hull violated zoning regulations barring commercial uses in neighborhoods
zoned for single-family properties. The
court upheld the Zoning Board's ruling

that the rental did not constitute an
authorized "accessory use" of a residential property.
A Kentucky appeals court concluded
similarly (in Vonderhair v. Lakeside Place
HOA) that short-term rentals of units in
the condominium community violated
residential use restrictions in the HOA's
covenants.
But the Washington State Supreme
Court reached the opposite conclusion,
ruling (in Wilkinson v. Chiwawa Communities Association) that the determining
factor was not how long a property was
rented to tenants, but how the tenants
used it. According to the court, the tenants were using the property for eating,
sleeping and other purposes, consistent
with its residential use.
A Florida Appeals Court used similar reasoning in a decision earlier this
year (Santa Monica Beach Property
Owners Association, Inc. v. Acord)
rejecting a condo association's effort
to prohibit short-term rentals. The
association argued that language in the
covenants mandating residential use
precluded the rentals. But, the court
said: "The critical inquiry is not the duration of the tenancy, but the character
of the actual use of the property by
those residing thereon."
Significantly, the Florida court also
noted the absence of language in the covenants specifically barring short-term
rentals. "The need for explicit language
in the covenants is particularly important," the court said, "where the use in
question is common and predictable,
as is the case with short-term rentals of
houses near the beach to vacationers."
May 2018

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Table of Contents for the Digital Edition of Condo Media - May 2018

Contents
Condo Media - May 2018 - Cover1
Condo Media - May 2018 - Cover2
Condo Media - May 2018 - Contents
Condo Media - May 2018 - 2
Condo Media - May 2018 - 3
Condo Media - May 2018 - 4
Condo Media - May 2018 - 5
Condo Media - May 2018 - 6
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Condo Media - May 2018 - Cover3
Condo Media - May 2018 - Cover4
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