By Jeffrey R. Schmitt
Community associations continue to struggle with the emergence of the “sharing economy” issues raised by AirBnB, VRBO and other online outlets (see CNN Money article: Why everyone is cracking down on Airbnb).
When addressing these issues, condominium, townhome, and neighborhood association boards should consider the following steps as a proactive approach to maintaining their desired community environment:
- Be vigilant. The good news is that you are only a few mouse clicks away from finding out whether your owners are making short term or transient leases. Nearly all of these sharing economy services are online and searchable by location. Additionally, urge other residents to keep an eye out for new faces on a regular basis.
- Know the rules. Does your association prohibit short term leasing or lodging? Is permission required to rent? Do tenants have access to all common areas? The answers to these questions should all be found in your governing document, the declaration or indenture and possibly in your rules and regulations as well. Know the rules of the game and consider whether they should be updated or amended to address emerging issues.
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06/30/16 7:52 AM
Condominium and Homeowner Associations, Real Estate | Comments Off on Short-term Rentals Via Internet Outlets: Three Tips for Homeowner & Condominium Association Boards |
Short-term Rentals Via Internet Outlets: Three Tips for Homeowner & Condominium Association Boards
By Jeffrey R. Schmitt
The popularity of vacationing or traveling via bed and breakfast lodging, or, as more popularly known, “BnB,” is rapidly on the rise. The concept allows an owner with a vacant house, condominium, apartment, or even a single room, to create investment property by listing the space on a website for rent to vacation and business travelers, often for very short stays and possibly as short as a single night. Property owners can make a little extra money, and travelers can often find better accommodations at lower prices. Add in the ease of use by listing your space on the internet – airbnb.com and vrbo.com are among the most popular sites – and this is a quickly expanding industry.
Frequently, the phenomenon overlooks the legal ramifications of being a short-term landlord, or essentially acting as a hotel or lodge. Some local governments are addressing the issue and requiring that property owners apply for permitting, pay taxes, or maintain compliance with other local rules relating to lodging or short-term leasing. However, the Airbnb concept also runs afoul of various considerations applicable to community associations, specifically condominiums and townhomes. Continue reading »
10/15/15 12:01 PM
Condominium and Homeowner Associations, Real Estate | Comments Off on No Vacancy – When Bed & Breakfasts Run Afoul of Condominium Communities |
No Vacancy – When Bed & Breakfasts Run Afoul of Condominium Communities
By David A. Zobel
A St. Louis bookkeeper recently pled guilty to wire fraud for embezzling more than $70,000 from his condominium association. His scheme spanned more than two years and involved more than 50 unauthorized wire transfers from the association’s financial accounts to the bookkeeper’s own personal bank accounts. Unfortunately for condominium and homeowner associations, this type of activity is all too common and demonstrates the critical need for associations to prepare and implement systems of financial checks and balances.
What each association’s system should entail to sufficiently reduce the risk of improper financial activity (while also recognizing the need for effective and responsive management) will vary from association to association depending on several factors, including association size, level of involvement from the homeowners, and governing rules. However, many effective systems begin with distributing financial supervision and actions between several individuals. This practice includes: Continue reading »
11/18/13 1:58 PM
Condominium and Homeowner Associations, Litigation, Real Estate | Comments Off on Condo Association Embezzlement Case Demonstrates Need for System of Financial Checks and Balances |
Condo Association Embezzlement Case Demonstrates Need for System of Financial Checks and Balances