Alternative Short-Term Uses

“Worst month of the Year: February. February has only 28 days in it, which means that if you rent an apartment, you are paying for three full days you don't get. Try to avoid Februarys whenever possible.”

- Steven Rubenstein

As I have discussed in the past, the New Hampshire Legislature has not yet addressed the issue of whether using a condominium for short-term rentals is a commercial enterprise, which would illegalize them in most associations, or whether they are not so different from a tenant in a condominium with a six-month lease. In both cases the occupant lives and sleeps there and uses it as a residence.

The difference is the high turnover, the clear use of a unit to make money versus any intent to actually live there, and the ability to make much more money on short-term rentals than long-term ones, all of which gets one closer to the line of a commercial enterprise. But no one has yet sued in New Hampshire, at least not in a case that has reached the New Hampshire Supreme Court. And so we wait.

But that's not all unit owners rent at associations. Around the nation, clever people have been using their condominium unit or home in an HOA for extra money, some of which your association may want to use or allow and others not.

This is not necessarily a strange or bad idea. By definition, community associations are a shared economy. They share roads, a clubhouse, insurance, landscaping, perhaps a pool, a dog run area, a picnic area, nature trails, and more. The use of these shared item help create a community, which is one of the objective of any good condominium association. The question is whether an association wants to go further and open these items, either to individual homeowners or to its association.

Here are few examples. 1

Swimply. It allows owners with an underutilized or idle pool (where kids have grown up and moved away) to list private pool rentals by the hour to other Swimply users. This is big business. Since October 2020 Swimply has raised $62.8 in funding.

And Simply has now expanded beyond that to allow for the renting of sports courts (tennis and pickle ball), gyms, unused docks and more, so it can be a revenue generator for an Association, something to think about at your association.

Neighbor. This program allows owners to rent out unused or underused spaces such as garages, basements, driveways, sheds, parking spaces, closets, attics and more to other Neighbor users for short and long term personal property storage.

CurbFlip allow owners to list and rent their unused garages, driveways, carports and parking spaces to the CurbFlip users.

Peerspace allows other Peerspace users to rent out unique spaces for such things as photo studios, classrooms, weddings, classrooms, meeting spaces and other events. Perhaps a good revenue generator for some associations with beautiful grounds for wedding pictures, prom photos and anniversaries and for clubhouse use.

SetScouter allows hosts to rent out their home and yard for such things as film or photography set locations for the entertainment and marketing industries.

Every association should start thinking about how it wishes to address these matters. If the association has such things as a pool, clubhouse, gym, unused property and/or unused athletic facilities, it might be worth exploring, first with your insurance company and second with the owners, but it might help keep fees lower than they might otherwise be, and it might be a revenue source to fund the reserves.

Whether you allow individual owners to rent out their parking spaces, for example, should be a discussion to be held at your association. I don't know how the New Hampshire Courts would rule on whether such uses violate the typical Declaration language that limits homes to residential uses, but it's likely they would see a difference in renting out a whole home for someone to stay there for varying periods of time versus someone coming in to have a party or swim and pay a fee for it. So, if you want to allow it, you would likely need to have your documents amended.

And, of course, there is no such thing as a free lunch. Such increased uses can help accelerate the deterioration of capital items like clubhouses, pools, roads and more.

And be careful. If you are going to let non-residents use the community pool through Swimply, just keep in mind that the Swimply contract does not require the owner to provide a bathroom. Just think about the consequences of that for a minute.

Finally, the New Hampshire Supreme Court and Legislature have not yet addressed these issues, but if your Association is against these types of alternative short-term uses, make sure you craft a policy that addresses them because it can be very lucrative, so it can be very tempting for owners to rent out whatever they can. One couple allegedly grossed $177,000 in renting out their yard for weddings, none of which the neighbors were likely invited to.

1Thanks to the Community Association Institute and Attorneys Rea C. Franck, Matthew Gardne, and Maria Kao for their presentation at the 2023 CI Law Institute entitled “Can I Rent Your Pool? Practical Strategies in the Ever-Evolving Gig Economy” from which much of the information in this article was acquired.