It is important to understand the rules and restrictions surrounding Texas short term rentals, especially for those living in homeowners associations. While rentals serve as a way to earn extra income, they are not always permissible. Violating short-term rental rules can result in fines and other penalties.
All About Texas Short Term Rentals
Short-term rentals (STRs), typically characterized by a rental duration of less than 30 days, are widely prevalent in the United States. In Texas alone, Airbnb reports that there were more than 82,000 active hosts in 2023.
It is no secret that rentals are a great source of added revenue, especially if the host lives in a high-tourist area. Still, if the host lives in a community association such as an HOA or condo, the rules might impede their ability to rent out their home or unit. Association rules often restrict what owners can and can’t do with their homes.
Are HOA Short Term Rental Restrictions Allowed in Texas?
It is common practice for homeowners associations and condo communities to restrict short-term rentals. In some places, the law prevents these associations from banning rentals outright. Given that laws can vary from one state to another, homeowners and board members should check their state laws.
Can an HOA restrict Airbnb rentals in Texas? The short answer is yes. Associations in Texas generally have the authority to restrict short-term rentals, including those listed on Airbnb and Vrbo. Of course, such restrictions should be outlined in the association’s governing documents to become valid and enforceable.
That means it is not enough for the association board to say rentals are prohibited or limited simply. The association should enact these rules properly and record them in their CC&Rs. Before any owner lists a short term rental in Texas, they should first check their association’s rules and restrictions to avoid penalties.
Are There HOA Short Term Rental Laws in Texas?
Texas currently does not have any short-term rental laws that specifically apply to community associations, such as HOAs and condominiums. In this state, associations generally have the power to enact and enforce restrictive covenants concerning rentals.
As previously noted, the association must have properly enacted and recorded these restrictions in the governing documents. Additionally, they must not conflict with federal, state, or local laws. When amending the CC&Rs to include a short-term rental restriction, it is best to seek the help of an attorney.
The authority of HOAs to restrict rentals through their CC&Rs primarily comes from the Texas Property Code. More specifically, Chapters 202 (Construction and Enforcement of Restrictive Covenants), 204 (Powers of Property Owners’ Association Relating to Restrictive Covenants), and 209 (Texas Residential Property Owners Protection Act) apply.
In Texas, associations can legally ban or restrict short-term rentals, provided that their governing documents permit such action. If an HOA currently does not have a short-term rental restriction, it may amend its CC&Rs through a membership vote. Amendments typically require a supermajority, but it depends on what the governing documents demand.
It is ill-advised for an HOA to restrict short-term rentals simply through a board resolution changing the operating rules and regulations. Doing so may present legal challenges if the restriction conflicts with the existing CC&Rs or lays outside of the board’s authority to make rules.
Requirements for Texas Short-Term Rentals
If an HOA does permit short-term rentals, the work does not stop there. Homeowners must still look into the requirements of their city, county, or local municipality. Several of these local areas have ordinances regarding short-term rentals.
Common requirements include registration, permits, and compliance with safety codes. Hosts must also pay Hotel Occupancy Taxes (HOT). Failure to adhere to these local codes and ordinances can result in monetary fines and other penalties.
What Happens if Governing Documents are Silent?
To understand HOA restrictions on Texas short term rentals, homeowners must check their governing documents. But what if the governing documents don’t tackle the subject?
If the association’s governing documents are silent, board members should take the necessary steps to amend them for clarification and clarity. Disputes often arise because of vague or silent CC&Rs.
The association might argue that rentals fall under more general clauses, such as “residential use only” or “commercial uses banned,” but these don’t explicitly address short-term rentals (STRs). Homeowners might defend themselves using this argument.
Such disputes can escalate and even lead to litigation. To avoid this costly and time-consuming process, association boards should amend their governing documents to explicitly address STRs.
Common Texas HOA Rental Restrictions
Rental restrictions can vary from one association to another, but some are more common. Common short-term rental regulations in Texas include complete bans on rentals, rental caps or limits, minimum rental durations, establishing responsibility for tenant violations, and proper insurance requirements.
Let’s break these down below.
1. Complete Ban
Since Texas law does not prohibit associations from banning STRs, many have taken this route. Condo communities, in particular, are more keen to prohibit rentals due to the damage they bring totally. With a total ban in place, residents can’t rent out their homes or units at all.
2. Rental Caps
A rental cap is a limit on the number or percentage of homes in an association that may be rented out at any given time. For example, if an association has a rental cap of 10% in a community of 100 homes, only 10 homes can be rented out. Such a cap helps protect the association’s character and preserve property values.
3. Minimum Rental Durations
If an association is more amenable to long-term rentals, it may impose a minimum rental duration. For example, an HOA might not allow rentals of less than 30 days, effectively prohibiting short-term rentals.
Long-term rentals offer greater stability and security. In contrast, short-term rentals make the neighborhood more vulnerable to security threats, property damage, and other risks. Permanent residents often prefer not to see strangers in the community frequently.
4. Responsibility for Tenant Violations
It is common for an association to hold the landlord or property owner responsible for any violations committed by their tenant. For example, if the HOA has noise restrictions and the tenant violates them, the board may impose a penalty on the owner or landlord. This ensures that owners and landlords take responsibility for the actions of their tenants.
5. Proper Insurance
An association may require owners and tenants to carry the proper insurance coverages. This includes landlord insurance, renters insurance, and general liability insurance. Requiring adequate insurance can help protect the association from legal risks and property damage.
Professional Assistance With Short-Term Rentals
It is often difficult to navigate Texas short term rentals, especially for self-managed associations. Fortunately, hiring an HOA management company can significantly streamline processes and assist with legal matters, including STRs.
Preferred Association Management Company offers exceptional HOA management services to communities in Central Texas. Call us today at 512-918-8100 or contact us online to learn more!
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