2017 CACM Law Seminar 1

Transcription

1 WHAT S NEW ON THE HOME SHARING HORIZON RISING TO THE CHALLENGE OF TODAY S SHARING ECONOMY Presented by Christina M. Baine DeJardin, Esq. Steven A. Roseman, Esq. TOPICS TO BE COVERED Rise of Short-Term Rentals Statutes Pertaining to Short-Term Rentals Concerns Regarding Short-Term Rentals Scams and Schemes Should you try to beat em or join em? Enforcement Municipal and Agency Response to Short-Term Rentals New Programs for HOAs Short-Term Rentals = Big Business 2017 CACM Law Seminar 1

2 Growth of Short-Term Rentals Big Money For Hosts 2017 CACM Law Seminar 2

3 Big Money for Communities RIGHT TO RENT PROTECTED SORT OF (CIVIL CODE 4740) An owner shall not be subject to a provision in a governing document that prohibits the rental or leasing of any of the separate interest unless that governing document provision was effective prior to the date the owner acquired title Grandfathering provision Also confirms HOA s right to restrict rentals WHAT PROHIBIT DOESN T MEAN Minimum lease terms do not prohibit rentals and are permissible 30 day minimum period is reasonable Mission Shores v. Pheil (2008) 166 Cal.App.4th 789 Mandatory Waiting Period (1-2 years is common) Rental caps/ceiling do not prohibit rentals and are enforceable 25% to 30% is common Are they reasonable? Harrison v. Sierra Dawn Estates Homeowners' Association, Inc. (20%) Reynolds v. Auburn Country Villa Homeowners Association (6 Units) 2017 CACM Law Seminar 3

4 Why Do We Care? Collective ownership Ownership = membership Shared risks/shared rewards Residential community Residents choose a particular lifestyle Character and type of community is part of bargain Recorded CC&Rs = community expectations Legal relationship is between association and owner Self-governance CONCERNS ABOUT SHORT-TERM RENTALS Protection of property (parking, access, amenities) Intense use of common facilities by short-term renters Common area damage Nuisance conduct (parties, noise, trash) CONCERNS ABOUT SHORT-TERM RENTALS Security Issues Compliance with rules, more violations and enforcement 2017 CACM Law Seminar 4

5 CONCERNS ABOUT SHORT-TERM RENTALS Maintaining existing character of community Marketability - lender guidelines, desirability, etc. Protecting and increasing property values Maintaining FHA and similar certifications Scams and Schemes Roommate or Renter? Roommates OK, whether paid or not So how can you tell? Subletting Scams Squatters Surprisingly easy to get tenant status Shockingly hard to evict squatter tenants 2017 CACM Law Seminar 5

6 SHOULD YOUTRY TO BEAT EM OR JOIN EM? No one right answer for all HOAs Allowing it may reduce violations and enforcement If allowed, can reasonably regulate it Helps owners with cash flow Financially sound owners good for HOA Positives may not outweigh the negatives If You Want to Fight Them Prohibit short-term rentals to the extent docs allow Amend docs to provide stronger, clearer rental restrictions and enforcement tools Gather evidence to pursue enforcement Impose reimbursement assessments Aggressively fine, and pursue legal action Minimum lease terms Rent entire home No hotel/transient use Document Amendments No advertising on short-term rental websites Increased fines for short-term rentals Increased fines for lost keys, fobs, etc. Other violations Business use Nuisance 2017 CACM Law Seminar 6

7 Enforcement Challenges Complaint based Excuses (guest, dog sitter) Lengthy enforcement protocol No legal relationship with tenants Who enforces? Cost of enforcing POLL #1: Enforcement Tools What have you found to be the best enforcement tool? A. Fines B. Turning off cable C. Turning off transponders D. Posting photos of offenders on the common area bulletin board next to the notice and agenda of your next board meeting 4aad-ad25-d3ce07541bb3&mod=polls&pollId=91663 Proving Violations Gathering evidence Copies of ads, listings Look for complaints re bed bugs Written witness testimony of activity Ask owners for copy of lease Sync surveillance camera clocks Front gate/desk logs Remember: NOTICE AND A HEARING! 2017 CACM Law Seminar 7

8 POLL #2: Evidence of Violations Which of these can be used as evidence of a violation of a restriction on short-term rentals? A. Security camera footage B. Front desk log book entry C. Anonymous telephone call from nosy neighbor D. Written complaint from neighbor E. Police report d3ce07541bb3&mod=polls&pollid=91664 PERMITTING SHORT-TERM RENTALS Why? If you can t beat them, join them Cover HOA security, repair and other expenses When? Special events only Indian Wells BNP Paribas Open Coachella/ Stagecoach/ Desert Trip Month of February for Super Bowl Anytime How? Amend the CC&Rs Be sure to carve out the ability to adopt supplemental Rules Adopt Rules and Regulations PERMITTING SHORT-TERM RENTALS What do you include? Clearly spell out events or timeframes Create owner requirements Provide copies of the lease Provide 24/7 contact information Pay a fee Flat fee Percentage of rental amount Address known issues Parking in specified areas Noise Build in specific disciplinary action Fines Prohibiting owner from short-term leasing in the future 2017 CACM Law Seminar 8

9 Adopt rules Amend Rules rental policy, disclosures by host, enforcement, fees understand local ordinance, require compliance different rules for short-term rental owners are reasonable (per Watts v. Oak Shores case) Access to Common Area facilities Parking Pool Fitness Center Fees to cover increased burden on association Note on Fees An association shall not impose or collect an assessment or fee that exceeds the amount necessary to defray the costs for which it is levied. (Civil Code 5600) Watts v. Oak Shores (2015) 235 Cal.App.4th 466 exact correlation of fee to expense not necessary good faith estimate is sufficient TriStar Pictures - Jerry Maguire (1996) More on Fees Is this an extra in the management agreement? Manager can help board determine appropriate fees to assess hosts Work with counsel to ensure board has the right tools Enforcement Policy, Schedule of Fines Reimbursement Assessment Authority 2017 CACM Law Seminar 9

10 Cities Are Trying Different Approaches Too San Francisco comprehensive Airbnb Law Tiburon Banned rentals less than 31 days Laguna Beach Moratorium on short-term rentals Indian Wells 7 day rentals until 7/4/18 (except during special events) Aliso Viejo No short term rentals in residential areas Anaheim Phasing out all short term rentals Airbnb v. San Francisco Airbnb sued San Francisco in June 2016, asking that a federal judge stop the newest version of SF s Airbnb law Law would require Airbnb to verify listings with the City Hearing in federal court in October 2016 Current status Response to City Action Airbnb collects TOT taxes and other fees for certain cities: San Francisco San Jose Santa Clara Oakland Palo Alto San Diego Malibu And more coming! 2017 CACM Law Seminar 10

11 Other State Agencies Are Getting Involved in Short-Term Rentals California Coastal Commission Commission has contacted several HOAs and municipalities Commission argues that rule prohibiting short-rentals constitutes a violation of the California Coastal Act The Commission believes such restrictions limit the amount of overnight lodging options on the coast and therefore limit public access to the beach. Airbnb s Friendly Buildings Program Pilot program for associations and building owners: Dashboard Notice to renters regarding applicable restrictions Profit sharing 5% to 15% Insurance For more information buildings@airbnb.com or check out buildingowners.withairbnb.com guidebook_for_equitable_policy CACM Law Seminar 11

12 Questions? Thank you! Morgan Hurlbutt, Esq. Russell & Mallett x 204 Melissa B. Ward, Esq. Hughes Gill Cochrane Tinetti, PC Mward@hughes-gill.com Thank you! Christina Baine DeJardin, Esq. Peters & Freedman, LLP cdejardin@hoalaw.com Steven A. Roseman, Esq. Roseman & Associates, APC roseman@raattorneys.com CACM Law Seminar 12

13 NEXT 15 MIN. BREAK 2017 CACM Law Seminar 13