A high-profile statewide appeal for short-term rentals who rent within homeowners associations is one step closer to being approved. A local law firm is representing a Rancho Mirage resident in a case that would exempt homeowners from certain rules.
As short-term rentals have become more popular, homeowners associations have become more involved in their operations.
“Prior to 2014, people had pretty much free rein to have short-term rentals,” said Shaun Murphy, Partner with SBEMP Attorneys.
In the last few years, homeowners associations have worked to add more rules and regulations, narrowing the scope of what a short-term rental actually is.
“Which they defined either as, some have them as seven days or less, some are 14 days or less and some are anything less than thirty days. And those have become much more prevalent, especially I would say in the last three to four years,” explained Murphy.
But a California appeals court recently offered a decision to give property owners more freedom.
“What this case does is it tells everyone in California that no the statute means any rule that prevents somebody from renting at all, whether it’s on a short-term basis, on a 30-day basis, on a year to year basis. is not enforceable against anyone who owned the property before that rule went into effect,” added Murphy.
The appeal is tentative and would only apply to those in HOA’s, it would also not change anything for cities with moratoriums in place.
“To go out and spend half a million dollars or more to purchase a home with the anticipation that you could afford it based on the rental income, and then not be allowed to do so doesn’t make sense,” said Kristen Perry, resident of La Quinta.
“Communities are still able to enact either regulations of short-term rentals or prohibiting short-term rentals either city-wide or community by community,” said Murphy.
Those in opposition to the ruling explain that characterizing short-term rentals as a commercial activity is a way to prohibit them, but in this case, the court did not agree.
“What the court said is, that doesn’t apply here, engaging in renting is not conducting a business, it’s no different than someone who rents on a month-to-month basis,” said Murphy.
The appeals court will hear oral arguments from both sides before making a final decision. Murphy tells NBC Palm Springs he doesn’t expect the court to reverse its decision.