Grandfathered Rental Rules for Condos and HOAs?

NAPLES, Fla. – For many years now, Chapter 718, Florida Statutes has provided that any new rental restrictions approved by the membership of a condominium as an amendment to the governing documents only applied to those who voted for the amendment or those who obtained title to the unit after the amendment was approved and recorded in the County Public Records.

Section 718.110(14), Florida Statutes, applicable to Condominiums, provides that: “An amendment prohibiting unit owners from renting their units or altering the duration of the rental period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of the amendment.”

There was nothing similar in the law governing Homeowners Associations (HOAs) when they amended their governing documents to change permissible lease-period durations and the number of leases per year. If the membership properly approved more restrictive amendments, they applied to all homeowners.

This changed effective July 1, 2021, after the Florida Legislature passed Senate Bill 630. Now, for all amendments to HOAs’ governing documents enacted after July 1, 2021, more restrictive rental regulations approved by the members will also, like condos, only apply to a parcel owner who acquires title to the parcel after the effective date of the amendment or a parcel owner who consented to, or voted to approve, the more restrictive rental regulation.

However, there are exceptions to this new regulation in HOAs.

If the amendment is to prohibit or regulate rental agreements for a term of less than six (6) months and/or the rental of a parcel for more than three (3) times in a calendar year, then the amendments will apply to all parcel owners.

So in HOAs, approved short-term rental restrictions of less than six (6) months and limiting of rentals to no more than three (3) times a year will apply to all owners; rental restrictions of six (6) months or more or limits of three (3) times, two (2) times or one (1) time a year are applicable to owners who voted to approve the amendments and those who acquire title to the parcel after the effective date of the amendment.

The intent of this new provision in HOAs appears to be to disfavor short-term leases less than six (6) months as well as multiple leases of four (4) or more times per year, while still allowing grandfathering of current owners who want to lease at least six (6) months or shorter periods up to three (3) times a year. At the same time, it’s acknowledging that some owners purchased their homes with a collection of rental income in mind.

Sales taxes come into play with rentals at six (6) months, and if a parcel is advertised for sale for more than three (3) times a year for less than thirty (30) days, the State of Florida could consider the unit a “hotel/motel.” If so, it could then have to retrofit the parcel with the same fire, life safety, and handicap equipment as a hotel/motel in Florida.