11 minute read
Real Estate
Cities get more short-term rental oversight
BY MARK MORAN
Sta Writer
Gov. Doug Ducey earlier this month signed a bill providing local cities and towns with more authority to fi ne and penalize short term rental “bad actors,” but stops well short of banning them or limiting the length of their leases.
Co-sponsored by Republicans Sen. J.D. Mesnard of Chandler and Steve Kaiser of Phoenix, SB 1168 is being called a “compromise,” and gives cities and towns increased authority to fi ne homeowners whose occupants violate noise and other community ordinances.
Those rules are often breached by weekend visitors who rent a large house for the weekend, fi ll it with raucous revelers who party late into the night, disrupting families and yearround residents’ peace and quiet, as well as their normal routines.
Philip Minardi, a spokesman for Expedia Group, hailed the legislation, calling it “a targeted, sensible package of protections and reforms to Arizona’s vacation-rental industry.” He said the measure puts “Arizona at the forefront of innovative policy solutions for this important industry that supports over 75,000 jobs statewide” and said it creates “new mechanisms to ensure neighborhood safety while fostering an environment that will allow vacation rental hosts and their guests to continue their important contributions to a vibrant tourism economy in Arizona.”
The Legislature in 2016 took away municipalities’ authority to impose regulations on short-term rentals but in recent years has given them some leeway to control rowdy party houses.
The northeast Mesa community of Las Sendas recently voted to amend its Covenants, Conditions and Restrictions, or CC&Rs, to restrict rentals to no fewer than 31 days.
The measure passed with the support of 75% of Las Sendas residents after a six-month campaign that the HOA board publicly supported. Of the 3,090 total votes cast, 2,604 votes were in favor of the amendment and 486 were opposed.
SB 1168 really has no bearing on authority to regulate short-term rentals, according to Las Sendas attorney Curtis Ekmark.
“The state doesn’t have anything to do with communities,” he said. “They left intact an association’s ability to ban STRs. But it allows the City of Mesa to fi ne people who violate noise and other ordinances.”
The measure also shifts fi nes and penalties away from online rental platforms such as Airbnb and VRBO and places them on the property owner or management company that is renting out the house. It also makes various other technical and legal changes to the terms of STR agreements in Arizona.
In an earlier interview with the Tribune, Shannon Preston who, with her husband Colin owns a home in Las Sendas but lives in Oregon, said that an outright ban on STRs is not in line with what they thought they bought into when they purchased their Mesa home.
“The CC&Rs are a contract that we entered into when we purchased our property with the homeowner’s association. “For them to just take a one-sided majority vote and remove our property rights doesn’t seem like that’s fair,” Preston said. “They are using our dues to take our property rights away from us.”
The Prestons advocated for an approach that stops short of banning short term rentals outright, such as a higher fee structure, which Senate Bill 1168 addresses, or a “three strikes and you’re out” policy for people who receive multiple complaints about their renters.
“There has to be some ways around just changing everyone’s rights,” Preston said.
The new state law may give people who live near disruptive party houses in Las Sendas an avenue for their frequent complaints.
Given that the new law empowers the City of Mesa to enforce noise ordinances, disgruntled neighbors will be able to call the police with their complaints. As it stands now, annoyed neighbors say they themselves fear being the target of legal action for “harassing” short-term homeowners’ “guests.”
Newer communities write short term rental bans directly into their CC&Rs as a matter of course, but older, more established communities that are often sought by weekend partiers have remained wide open and largely unregulated.
This issue is not likely to go away any time soon for Las Sendas or any other community that votes to ban the short-term rentals.
A quick internet search reveals page after page of suggestions on how to get around such regulations, for instance. Beyond that, Valley real estate attorney Ben Gottlieb says a decision in March by the Arizona Supreme Court, Kalway v. Calabria, could have a signifi cant impact across the entire state, and on a community’s ability to change its CC&Rs.
In a nutshell, the case states that in order to amend them, a community’s original CC&Rs must make mention of the possibility that the rules could, potentially, be altered in the future.
“You have short term renters who will come in and seek declaratory relief,” said Gottleib. “And say ‘wait a minute, under the Kalway case this amendment is invalid and I want to protect my investment here and I had no notice that this would happen.’ So, I think this is going to have interesting ramifi cations. The Kalway case really makes it clear that everything hinges on what is in the original CC&Rs.” State Rep. John Kavanaugh, R-Scottsdale, who has been involved in short-term rental legislation since they became an issue, said it will be di cult to get around the HOAs approved ban.
“The HOA’s will have no problem enforcing that,” he said. “First of all, the neighbors will know when di erent people start showing up every weekend.”
Kavanaugh, a pro-business Republican understands both sides of the issue, but falls clearly on the side of people opposed to short term rentals.
“On one side there is the right of people to own their property and do what they want,” he said. “On the other side is the right of people to rely on zoning laws that were in e ect when they bought their land.
“No one purchased their homes thinking that there would be horizontal hotels popping up next to them. The fact that people made the biggest investment of their lives and then had that open up next to them is a real shame. It destroys their life and their property value, he said.”
As far as the Kalway v. Calabria case?
“That’s gonna play out in the courts,” Kavanaugh said.
But even Ekmark, the Las Sendas attorney, acknowledges that the community’s CC&R amendment is far from a slam dunk.
“Every association considering banning short term rentals should be aware of Kalway,” he said.
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How infl ation can impact resident, business leases
BY BEN GOTTLIEB
Guest Writer
After enduring the COVID-19 pandemic and navigating around a barrage of state and federal executive orders inhibiting landlords’ ability to carry out eviction actions, landlords and tenants are now living in a world facing the highest rates of infl ation since the Great Infl ation period transpired during the 1970s.
High infl ation in the overall economy is translating into higher rent being demanded by landlords and carries key implications in the landlord-tenant space, especially since most landlords and tenants have not paid much attention to it lately since infl ation has not been a signifi cant news headline in decades.
Also, long-term leases – especially commercial leases – usually provide the tenant with an option to renew the lease several years in the future from when the original lease is executed.
Some leases (mostly commercial) have provisions addressing infl ation in connection with the renewal period in the event a tenant exercises a negotiated option to renew the lease.
Extra attention and care should be used in drafting options to renew in leases.
Landlords may want to negotiate shorter rental periods and/or have lease provisions addressing escalating rent that accounts for rising rental rates in any renewal period, while tenants should attempt to negotiate rental rate “locks” or modest rent increases.
It is important to note that most leases provide the tenant with the option to renew the lease. The option must generally be exercised in writing and in accordance with the option to renew clause. If the tenant does not exercise the option to renew but remains at the premises, the tenant will be considered a “holdover tenant.” Lease provisions addressing holdover terms usually contain a higher rental rate and the holdover period runs month-to-month (meaning the holdover term can be terminated with 30 days’ notice).
Many tenants are left scrambling at the end of their lease periods and do not want to renew their lease at a higher rental rate. Ultimately, if the lease is properly terminated by the landlord, the landlord could proceed with an eviction of the tenant.
In the residential context, the landlord is not permitted to “lock out” the tenant.
Under the Arizona Residential Landlord Tenant Act, the landlord must proceed with a judicial eviction and obtain what is called a Writ of Restitution from the eviction judge.
In the commercial realm, if the lease permits a “lock out” remedy, the landlord may simply change the locks if the tenant has defaulted under the lease and need not pursue a judicial eviction.
Of course, a landlord cannot raise rent or charge the tenant unauthorized fees in contravention to the lease terms. In all cases, the parties should follow the lease. Patrick MacQueen and Benjamin Gottlieb created a di erent kind of law fi rm using state of the art legal software and technology combined with award-winning legal minds to provide the best real estate representation available. If you have additional questions, contact Ben Gottlieb at 602-5332840 or ben@mandglawgroup.com.
Quick home fi xes can save on your electric bill
STSN NEWS SERVICES
Whether you live in a mansion or a condo, homes consume a ton of expensive energy—in the form of electricity, water, or gas.
You can lower these bills and free up cash and the changes are far from complicated—some are as simple as switching your lightbulbs or tweaking the settings on your appliances.
Energy Sage says residential electricity rates have increased about 14% over the past 10 years. With fuel costs continuing to rise, you can bet your bottom dollar that that number isn’t getting any lower.
One way to cut down on your electric bill is by killing the “energy vampires” in your home.
Those are the little lights all over your house that indicate printers and chargers are plugged in and ready but not in use. Energy vampires suck dollars out of your wallet, an average of $250 a year for a typical U.S. household.
The low-tech solution? Unplug these items before bed, which will save you as much as 10% on your energy bill. The high-tech solution? Power cords such as the Embertec Emberstrip AV+ ($45) will turn o equipment when they sense it’s not in use.
Another way to reduce your bill is switching to low-energy lightbulbs. A sixpack of LED bulbs (which replaces 60-watt incandescent bulbs and retails for only $20) can save you up to 85% on your energy bill.
And because these bulbs last an average of 18 years, another bonus is not needing to swap them out as often!
Many local utility companies o er energy audits—often for free. This involves experts assessing your home’s energy consumption patterns and looking for areas where you could cut back on electricity, gas, or water to lower your utility bills.
Auditors might do this remotely by poring over your records. Or they might visit your home to examine everything from its windows to ductwork to showerheads—saving you as much as 30% of your monthly bills.
Something you might not have considered when it comes to your ultrahot showers is how much scalding water costs.
“About 20% of the energy used in a home goes toward water heating,” says Michael Thomas, founder of Carbon Switch. “One of the most e ective ways to cut down on that energy use is to install a heat pump water heater (aka hybrid water heater).”
According to Thomas, you can save anywhere from $20 to $600 a year making this switch.
Another option when it comes to your pricey hot water? Consider cranking it down just a tad. Lowering the settings by just 20 degrees (to a still-hot albeit more reasonable 120 degrees Fahrenheit) will save you anywhere from 6% to 10% on your heating costs.
Yes, your clothes will still get clean—some stains actually come out more readily in cold water—and you’ll save about $130 a year.
And since dryers account for 12% of the energy used in an average household, consider line-drying clothes in nice weather to save between $100 and $280 per year, depending on how many loads you dry.
“Even the smallest gaps around a window or door frame allow air to leak inside,” says Mark Liston, president of Glass Doctor. “An eighth of an inch gap under a 36-inch-wide door in the winter will let in as much cold air as a 2.4-inch-diameter hole punched in a wall.”
Depending on where you live, you could save as much as 20% on heating and cooling costs by properly sealing and insulating your windows and doors.
Sealing your home from air leaks isn’t the only way to save money on heating and AC bills. Another idea? Consider installing a set of smart thermostats. “Smart thermostats can save the average homeowner $100 on their home energy bills a year,” says Thomas. “Given that most smart thermostats cost less than $200, that means a payback of fewer than two years.”
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