HOAleader.com - Tip of the Week - April 20, 2018
Published: Fri, 04/20/18
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Court Refuses to Enforce HOA Rental Restriction on the Books for Nearly 50 Years
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Homeowners are working very hard to get around HOAs' rental rules, and a South Carolina court has just handed them a win.
In this week's tip, we discuss the latest case.
An appellate court seems to have thrown its arms up and said, "We can't decide!" Because both the owners' and the HOA's interpretation of the governing documents was reasonable, the court determined it couldn't uphold the HOA's rental restriction.
The case is Community Services Associates v. Stephen and Maria Wall, and it involved an HOA seeking to prevent homeowners on Hilton Head Island from renting out the first floor of their home while living in their upstairs guest suite.
The Sea Pines Plantation adopted its current restrictive covenants in 1970—yes, nearly 50 years ago—and the restrictions say that all lots in residential areas are to be used only for residential purposes. They also say that a guest suite or similar facility without a kitchen may be included as part of the main dwelling or an accessory building, but that it may not be rented or leased separate from the rest of the property.
The Walls' home has a kitchen on the first floor. Its second story consists of a guest suite accessible only by an outside staircase, and the Walls admitted that they kept an induction plate, a toaster oven, and a mini-refrigerator in that upstairs guest suite and that they occasionally prepared food for themselves and washed their dishes upstairs.
The Walls initially rented a room in their home on Airbnb but changed their online listing to a "whole-home" rental after their HOA raised concerns. Their HOA eventually sued, alleging that the Walls were running a bed and breakfast, thereby violating the covenants prohibiting rental of a guest suite from the rest of the property.
The Walls' response? They did rent their whole house. And they happened to live in the guest suite.
In a nutshell, the court held that the covenants didn't expressly or in plain and unmistakable language require a residence with a guest suite to be rented in its entirety in every circumstance. And since the documents could be subject to both parties' interpretation, the court chose to adopt the interpretation that least restricts the use of the property. Hence, the restriction was unenforceable.
Find out what our experts say about this ruling—particularly why one expert says the court punted—in our new article: https://www.hoaleader.com/members/3707.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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South Carolina Court Tells HOA Its 48-Year-Old Rental Rule Isn't Enforceable
Homeowners are working very hard to get around HOAs' rental rules, and a South Carolina court has just handed them a win. In the latest case, an appellate court seems to have thrown its arms up and said, We can't decide!- Because both the owners' and the HOA's interpretation of the governing documents was reasonable, the court determined it couldn't uphold the HOA's rental restriction.
Click here to read full article:
https://www.hoaleader.com/members/South-Carolina-Court-Tells-HOA-Its-48YearOld-Rental-Rule-Isnt-Enforceable.cfm
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Virginia Agency: HOAs Shouldn't Be Afraid to Question Requests for Accommodation
In this week's tip, we report on a Virginia government agency that has issued guidance that essentially tells HOA and condo boards that they can ask reasonable questions in response to requests for comfort animals, and that may mean questions about the duration and location of the treatment the requester has purportedly received, plus more.
Click here to read full article:
https://www.hoaleader.com/public/Virginia-Agency-HOAs-Shouldnt-Be-Afraid-Question-Requests-for-Accommodation.cfm
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More on the Pushback Against Comfort Animals in HOAs: Virginia Agency Says Be Not Afraid
A Virginia government agency has issued guidance that essentially tells HOA and condo boards that they can ask reasonable questions in response to requests for comfort animals, and that may mean questions about the duration and location of the treatment the requester has purportedly received, plus more.
Click here to read full article:
https://www.hoaleader.com/members/More-on-Pushback-Against-Comfort-Animals-in-HOAs-Virginia-Agency-Says-Be-Not-Afraid.cfm
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New Research: Strong Condo Reserves Raise Property Values
We're discussing research findings that one industry expert calls the holy grail- in this week's tip. The issue is whether strong reserves affect property values. And what exactly is adequate- when it comes to reserves?
Click here to read full article:
https://www.hoaleader.com/public/New-Research-Strong-Condo-Reserves-Raise-Property-Values.cfm
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New Research May Help You Find Your HOA Reserve Sweet Spot
Do strong HOA and condo reserves affect property values? And what exactly is adequate- when it comes to reserves? Robert Nordlund, a reserve specialist who was one of three expert panelists for an HOAleader.com webinar, HOA Reserves and Other Funding Options: Tips to Be a Smart HOA Money Manager, says his company recently identified and measured the link between a strong reserve fund and improved home values. He also says he and others have recently has been able to finally define adequate reserves" for boards, their attorneys, and their D&O carriers.
Click here to read full article:
https://www.hoaleader.com/members/New-Research-May-Help-You-Find-Your-HOA-Reserve-Sweet-Spot.cfm
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