Article by Gary Mars in Today’s Daily Business Review: “Airbnb Gone Wild? Decision Clarifies Rules on Short-Term Condo Rentals”

GaryMars-200x300Firm partner Gary M. Mars authored an article that appeared as a “Board of Contributors” guest column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “Airbnb Gone Wild? Ruling Clarifies Rules on Short-Term Condo Rentals,” focuses on a recent decision by the Second District Court of Appeal that found that the fairly standard language present in the declarations of condominium and accompanying rules and regulations for many properties does not grant unit owners with the unrestricted right to lease their residences.  Gary’s article reads:

The ruling came from the Florida Second District Court of Appeal in the case of Le Scampi Condominium Association v. Hall. Le Scampi had petitioned the lower court for injunctive relief against the unit owners to prevent them from leasing their residence for less than one month without prior approval by the association in violation of its rules.

The Halls did not dispute to the trial court that they had rented their unit for periods of less than one month without prior approval, which constituted violations of the association’s rules. Their defense was based on arguments that those rules were unenforceable because they conflicted with their right to lease their unit under the community’s controlling documents.

The lower court issued a final summary judgment in favor of the Halls based on its finding that the conflict indeed existed and the language in the original declarations of condominium for the property supersedes any lease restrictions in the rules and regulations.

dbr-logo-300x57The appellate panel found that the trial court’s interpretation of the declaration was inconsistent with its plain language. It ruled that the section in question does not provide that the right to sell, lease or transfer a condominium unit is unrestricted with the exception of a notice requirement. Instead, the declaration merely imposes a prior-notice requirement and specifies the contents of the notice, but it does not otherwise address a unit owner’s right to sell, lease or transfer their unit to persons other than family members.

Gary’s article concludes:

The court concluded that because the controlling declaration does not expressly grant unit owners the unrestricted right to sell, lease or transfer a unit, a court cannot bestow such a right. Its unanimous opinion found that the provisions in the association’s rules governing rentals requiring prior approvals and disallowing them for periods of less than one month were not in conflict and were enforceable.

The appellate panel’s rationale was supported by the declaration’s failure to address rental restrictions other than to family members. As a result, the rental restrictions stated in the rules and regulations were deemed valid. It reversed the lower court’s judgment in favor of the Halls and remanded the case with directions for the court to grant the association’s motion for summary judgment.

This ruling will help to clarify that the fairly common condominium declarations language in question in this case does not provide for the right to unrestricted rentals for unit owners. With the growth of Airbnb and its competitors, the ruling is also a reminder to associations that they have the ability to establish and enforce rules to prevent unit owners from creating a revolving door of unfettered short-term rentals that could potentially cause serious nuisance, security and liability issues.

Our firm salutes Gary for sharing his insights into the ramifications of this ruling with the readers of the Daily Business ReviewClick here to read the complete article in the newspaper’s website (registration required).