The “Shared Economy”— where economic and social activity occurs directly between individuals with the help of an online format— is reshaping our national economy. Today we can easily monetize everyday assets, including your car and home, in ways that were previously impossible.
This innovation and advancement has not occurred without growing pains, many of which have occurred in the context of real estate. Airbnb, FlipKey, HomeAway, VRBO, and others have made it relatively simple to use your house, apartment or condo as a source of income, by renting all or part of it, to temporary or transient guests.
Although these services have been a boon for many who have second homes or want income from their principal place of residence, it has caused concern and complications for state and local governments, community associations, and neighborhoods with and without private covenants. Many community associations already have rental restrictions that cover transient rentals, but many have had to amend their documents to adapt to the proliferation of this activity. For a community association, this take a variety of forms: regulating the impact of short term rentals (parking, noise, professional management, capacity limits) or it can mean an outright prohibition.
Private covenants, ones that are attached to the title of your property but do not fall under the Virginia Property Owners Association Act can be impacted by this type of use as well. We have worked with neighborhoods to amend these restrictions to both permit and prohibit these types of uses.
The regulatory schemes of local and state governments are rapidly changing in this field. Certain localities have taken a hard line on this type of activity, while others have welcomed it and sought to ensure it is successful while protecting the interests of surrounding properties. The Virginia General Assembly has and will continue to consider how localities and community associations can regulate internet based rental platforms. Because it affects the clients and communities we represent, we are constantly monitoring these changes.
Finally, if you are considering purchasing a property with the intention of using it as a short-term rental, be sure to do your due diligence to determine any potential impediments. An experienced real estate attorney can help you evaluate your purchase before you undertake such a significant financial obligation.
Do you have any questions or concerns about how short term rentals might affect your community or whether you can use your property as a short-term rental? Give us a call or email!
Tarley Robinson, PLC, Attorneys and Counsellors at Law