The FHA will deny certification to condominium associations if they allow short-term or "transient" housing, i.e., rentals for less than thirty (30) days. For those associations with no rental restrictions, there are two solutions:
1. Amend their governing documents to remove the offending language, or
2. Provide a dated and
signed statement on association letterhead that no units in the
development are leased for a term of less than 30 days and tenants are
not provided services commonly associated with hotels. (See FHA announcement.)
CC&R Amendment. The Davis-Stirling Act provides that rental prohibitions adopted after January 1, 2012 do not apply to existing owners in a development; they only apply to those who acquire property after the prohibition has been adopted. (
Civ. Code §4740.)
Because this requirement is so recent, there is no case yet telling us what is an acceptable restriction versus an unacceptable prohibition.
RECOMMENDATION: In our opinion, an amendment requiring all rentals to be thirty days or longer would apply to all owners, not just those who acquire property after it was adopted.
ASSISTANCE: Associations needing legal assistance can
contact us.
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