HOAs Have No Power To Ban Short-Term Rentals

As the battle rages in communities over the use of short-terms rentals (STRs), the Court of Appeal has made it clear that homeowners associations (HOAs) have no dog in the fight.  In Greenfield v. Mandalay Shores Community Assn (2018) 21 Cal.App.5th 896, the HOA banned STRs of less than 30 days.  One of the homeowners sued and sought an injunction preventing the HOA from implementing the ban.  The homeowner argued that the ban violated the Coastal Act because the HOA did not get a coastal development permit before adopting the STR ban.  The trial court denied the injunction, holding that the court did not have jurisdiction to decide whether the HOA rules conflicted with the Coastal Act.

The Court of Appeal reversed, holding that the court did have jurisdiction to decide the issue.  The Court went further and held that HOAs cannot ban STRs.  Instead, it is the right of the Coastal Commission (when it has jurisdiction) and the city to decide what restrictions, if any, to place on STRs.

Going forward, HOAs must be careful not to exceed their authority in regulating the rights of their homeowners.  In the future, we may see more interaction between HOAs and their cities/public agencies to work together to address the proper role of STRs in their communities.

If you have any questions regarding the powers of HOAs, please contact Greg Woodard at (949) 769-6602.


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