J. Patrick Sutton Cases & Issues Blog

An innovative approach to short-term occupancy even where STR's are not allowed

Part of the fallout from my successful prosecution of the Zgabay case validating short-term rentals when deed restrictions only allow "residential use" is that HOA's are now doing what they always should have done in the first place: get together proper votes of all owners to amend the deed restrictions. However, that can hit very hard those persons who purchased properties based on the deed restrictions in place at the time of purchase — that is, where short-term rentals were not barred at the time of purchase, but then the right to rent for short terms got taken away by a valid amendment to the deed restrictions.
I think there's an answer to that problem, however. In the early years of my practice, I helped clients create ownership structures premised on serial short-term occupancy, but without implicating deed restrictions or even municipal ordinances that bar short-term rentals. It is not a cheap or easy solution, and it implicates several areas of the law, but I think it holds great promise and would be difficult to challenge even with an amendment to deed restrictions. It also requires owners to view "ownership" in a new, more flexible way, however, so it won't be right for everyone.

If you own a property outright (without a mortgage), and are willing to invest in an innovative legal structure that holds great promise in avoiding STR bans altogether, make an appointment to come see me. While the legal fees to execute on this idea are not insignificant, the rent potential of a given property may well justify the investment.

I believe strongly in property owners' right to allow people of their own choosing to reside at their property. I can conceive of few things more fundamental than the right to determine who gets to be in your home. I have devoted a significant share of my practice and my own free time to defeating or circumventing those who believe that a flat prohibition on an ordinary human activity is the answer to a problem. Prohibition didn't work in 1920 with alcohol, and it won't work in the 21st Century with home occupancy. When landlords became slumlords, we didn't ban leasing — we regulated it. Yet the opponents of STR's say that the only way to address rentals of short durations is to ban them. It's faulty logic on a number of levels, and I believe strongly that in time, freedom and innovation will prevail.
J. Patrick Sutton Cases & Issues Blog