In the Dirt: A Real Estate Legal Update

Short-term rentals have become a complex topic for many municipalities, which in turn affects homeowners or Homeowner Associations interested in the issue. Various objectives of the governing body in regard to regulating short-term rentals may affect their treatment of this issue. While one municipality may want to revitalize its vibrant downtown by encouraging short-term rentals, another may prefer to crack down on short-term rentals altogether to preserve neighborhoods with single-family homeowners. The interests of property owners who wish to earn extra income from short-term rentals must be weighed against their neighbors who desire calm and predictable surroundings. Here's what municipalities making decisions regarding short-term rentals must also consider.

Homeowners may wish to engage in backyard event rentals to earn supplemental income. For example, some homeowners may rent out their pool and backyard space for parties. While this might seem like a clever opportunity for homeowners to make an extra buck, such backyard event rentals will likely cause tension between homeowners and their HOA or community management entity.

Owners and managers of multifamily rental properties are facing a growing number of challenges. The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) reported more than 1,900 formal complaints were filed, and there were more than 6,000 contacts to their hotline, related to landlord/tenant disputes last year making it the number one category of complaints, and a massive increase since 2018 when there were 1,188 complaints. Clearly landlord/tenant conflicts are escalating and will continue to rise if some pending proposals are enacted.

Short-term rentals of property, including, rentals for as short of time as on an hourly basis, are increasing in frequency around the country. The character of a community can be dramatically altered by such rentals and cause concerns for homeowners related to property values, security, and peace of mind.

Solar panels may be a source of controversy in residential neighborhoods. On one side of the debate are homeowners wishing to invest in renewable energy and take advantage of any available federal tax credits. On the other side are homeowners who purchased their homes in reliance upon the protection that a homeowner’s association (“HOA”) would offer by maintaining preferred aesthetics, abating nuisances, and preserving property value. As a result, HOAs need to know whether they are permitted to regulate the use of solar panels by their residents.

Municipalities adopt zoning ordinances in order to regulate the use of land within their boundaries and to provide for future growth without over-taxing their infrastructure and other resources. 

Short-term rentals have become a popular way for homeowners to earn extra income when they are away from their property. Websites like Airbnb and Vrbo have made short-term rentals easy and accessible. For homeowner associations (“HOAs”), management companies, and other community members; however, these short-term rentals present various problems.

Solar panels are increasing in popularity for both residential and commercial properties. Some property owners may consider installing solar panels to meet their own energy needs; others may consider installing them to generate income or to provide energy for public use. Given the high-value status of property assets, the long-term impact of solar panels is an important consideration.

Homeowner associations (HOAs) across the country should be aware of the bounds of their authority for regulating installation of solar panel systems on members’ homes. Mastering this delicate balance will help HOAs maintain both aesthetics and property value while, to some degree, honoring the individualized wishes of their residents.

A new Missouri law may be a new cause of concern for homeowners. The new law, which restricts the ability of local government to regulate home occupations with zoning ordinances or other regulations, may allow noxious businesses to become new neighbors. The law, created in response to people working from home during COVID-19, has likewise caused concern for municipalities across the state as they scramble to satisfy concerned homeowners. This law may go beyond its original intention of allowing work from home as became necessary during the pandemic, and it is especially troublesome for homeowners in dense housing urban areas who may be more likely to experience disturbances from home businesses.