Idaho Land Law

A Blog Discussing Current Issues of Land Use, Real Estate, and Construction Law in the State of Idaho.

Filtering by Tag: CCRs

Oh no… The Idaho Supreme Court may have killed Airbnb in most neighborhoods

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With the growing popularity of short-term rental sites such as Airbnb and VRBO it was inevitable that we would see a court case on whether or not a homeowners’ association (“HOA”) could prohibit the short-term rental of real property.  I knew this would eventually be decided due to the numerous calls we receive from HOA boards and members concerning rental units.  Whether these HOA rental concerns are fair or unfair is a question for another article, but regardless it is safe to say that HOA boards and members have real concerns about renters.

For years, the question in Idaho has been whether or not an HOA could prohibit the rental of real property?  We now know, at least for short-term rentals, the answer is… Yes.

In Virgil Adams v. Kimberly One Townhouse Owner’s Association, Inc., the Idaho Supreme Court upheld an Ada County District Court’s decision that an HOA could prohibit the rental of property for periods of less than six months.  The Kimberly One case concerns a property owner, Virgil Adams, who had been renting his subdivision unit to short-term renters as a vacation property.  The Kimberly One HOA had objections to such use and in response amended its conditions, covenants and restrictions (“CCRs”) to prohibit short-term rentals.  Mr. Adams filed suit alleging that such amendment was an unreasonable restriction on the use of his property and that the amendment was not in keeping with the original CCRs.

The Idaho Supreme Court examined the District Court’s ruling and held that because the original CCRs clearly provided for their amendment, that the HOA had the right to amend the CCRs and prohibit short-term rentals.  The Court found this despite the fact that the original CCRs allowed for leasing or renting a subdivision property. The Court basically examined this issue as a freedom to contract argument and held Mr. Adams to a sort of caveat emptor standard in regards to what could possibly be restricted in HOA subdivisions.

So what are the practical implications of this case?  The obvious implication is that an HOA can restrict short-term rentals. This of course could have a dramatic impact on property owners earning income and paying debt service by using Airbnb or other online sites such as VRBO.  The other thing we have learned is that in the future a court may uphold a complete restriction on rentals in HOA controlled subdivisions.  We do not know if the Court would uphold such a restriction but given this holding, individuals looking to purchase investment rental property should know this is a distinct possibility.   

One final thought on this case.  The Court did say that, “There is doubtless a point when a party has changed his or her position in reliance upon the covenants in effect to a degree that enforcement of an amendment would be precluded.”  We do not know where this “point” lies but a potential purchaser of investment rental property could request a written statement from the current HOA board approving the property as a rental.  This document could later be offered as evidence of reliance on the CCRs and potentially used to defeat an amendment restricting rentals.  Just a thought and there are probably other methods to document this reliance in hopes that a Court would negate an amendment restricting long-term rentals.  

Waging War on Your Neighbors... and other Life Lessons

Land use disputes between neighbors always make for an interesting read and the following case concerning the City of Post Falls, Idaho is no different.  See Greenfield v. City of Post Falls 2014 WL 1343478.  There are a variety of lessons that could be taken from this decision but mainly it is a good read on how a dispute between neighbors can go terribly wrong. 

In 2013, Christina Greenfield filed a complaint against the City of Post Falls, its mayor, and various administrators and employees (past and present), as well as members of the Post Falls Police Department, seeking damages for the Defendants’ alleged failure to enforce its zoning laws to her detriment.  The events giving rise to the complaint begin with Ms. Greenfield’s purchase of her home in 2005, which was when she first became aware that her neighbors (the “Wurmlingers”) allegedly were operating an illegal bed and breakfast out of their home. Ms. Greenfield claimed that the operation of a bed and breakfast was prohibited under the City’s ordinances and that the City took no action to enforce its laws.

Part of Ms. Greenfield’s dispute with the Wurmlingers involved an arborvitae hedge consisting of twenty-four arborvitae shrubs planted by the Wurmlingers on the property line separating Greenfield’s property from the Wurmlinger property. Greenfield alleged the hedge constituted a fence, that it exceeded the height limit set forth in the City’s Fence Ordinance, and that it obstructed Greenfield’s view. Greenfield demanded enforcement of the fence ordinance and the City sent enforcement letters to the Wurmlingers.  The Wurmlingers responded by trimming some of the hedges, but not all.

In 2006 Ms. Greenfield hired an attorney and a demand letter was sent to the Wurmlingers directing them to trim the arborvitae hedges to five feet in height.  The Wurmlingers and Ms. Greenfield thereby entered into an agreement that the hedges would be maintained at six feet. 

In of 2008, the City issued a warning letter to the Wurmlingers regarding the expansion of their business activities. Ms. Greenfield alleged the Wurmlingers ignored the City’s demand to scale back their bed and breakfast business and that, but for one letter, the City did nothing further to enforce its zoning ordinances to halt the neighbors’ activities. Ms. Greenfield persisted in attempting to have the City enforce its zoning regulations by writing several letters in 2009, which she alleged were not responded to by the City.

As you can tell from the history of the case so far, this was an ongoing battle between not only the neighbors but also the City in regards to the hedges and the Wurmlingers bed and breakfast. 

On April 1, 2010, Ms. Greenfield used some self-help remedies and trimmed ten of the arborvitae shrubs to six feet. Mr. Wurmlinger called the police, who began an investigation. The police submitted a criminal complaint against Ms. Greenfield and as a result, charged her with Felony Malicious Injury to Property.  Ms. Greenfield was served a summons to appear in district court, wherein she was formally charged. Ms. Greenfield alleged she was arrested, hand cuffed, searched, and forced to sit in a chair for several hours while being processed for the crime. Greenfield was arraigned on the charges on June 23, 2010, and she appeared before Judge Friedlander, the City Attorney’s wife. Because the judge did not recuse herself given the history between Greenfield and the City Attorney’s office, Ms. Greenfield alleges a miscarriage of justice.  On October 4, 2011, Ms. Greenfield was found not guilty of the criminal charges. 

That was not the end of the hedge dispute, Ms. Greenfield alleged in this case that Mr. Wurmlinger trespassed on her property ten times to trim the arborvitae shrubs and each time the police would not prosecute Mr. Wurmlinger.  Mr. Wurmlinger also filed numerous malicious injury property reports against Ms. Greenfield beginning in 2007 and continuing through the date of the lawsuit.  There are other claims by Ms. Greenfield in the lawsuit concerning conspiracy of the police force, the confiscation of garbage and other matters that make the case even more interesting. 

The Court in this case granted the Defendants’ motion for judgment on the pleadings without leave to amend.  This case is interesting not so much for its legal holding but as an example of how disputes between neighbors can drag on for years and take on a life of their own. I often receive calls from people complaining that a neighbor is not following the conditions and restrictions within their particular subdivision.  While I think it is important to enforce the restrictions of a neighborhood’s CCRs, I also think it is important (and generally easier on one’s life) to try to work things out with your neighbors before turning to the courts. 

For most of us our homes are the single largest investment we will make.  Our emotional attachment to where we live sometimes has a way of clouding our judgment when it comes to making decisions about our neighbor’s actions.  My suggestion for people that have problems with their neighbor is to seek guidance from someone that has no outside involvement and can rationally examine the situation.   Such actions should be cheaper and less complicating for your life than waging a long term war against your neighbors.  

New Prohibited Conduct by Homeowners’ Associations

Laws change.  It’s that simple.  Recent changes to Idaho law concerning homeowners’ associations (“HOA”) and the impact such law may have on an HOA’s ability to levy fines for violations of its CCRs is the subject of our latest blog post.

As you may be aware, Governor Otter recently signed a new law that prohibits certain actions by HOAs.  The new law (I.C. § 55-115) prohibits the imposition of a fine by an HOA on its members unless such authority is clearly stated within the subdivision’s CCRs.  The new law becomes effective July 1, 2014. 

An excerpt of the new law states:

(2) No fine may be imposed for a violation of the covenants and restrictions pursuant to the rules or regulations of the homeowner's association unless the authority to impose a fine is clearly set forth in the covenants and restrictions and:

(a) A majority vote by the board shall be required prior to imposing any fine on a member for a violation of any covenants and restrictions pursuant to the rules and regulations of the homeowner's association.

(b) Written notice by personal service or certified mail of the meeting during which such vote is to be taken shall be made to the member at least thirty (30) days prior to the meeting.

(c) In the event the member begins resolving the violation prior to the meeting, no fine shall be imposed so long as the member continues to address the violation in good faith until fully resolved.

(d) No portion of any fine may be used to increase the remuneration of any board member or agent of the board.

Why is understanding this new law important for developers and HOAs? 

In short, one of the key tools for maintaining the character of a neighborhood and preserving property values is the power of an HOA to levy fines against property owners who violate the subdivision’s CCRs. Without authority to levy fines, an HOA does not have the proper tools to address violations of its CCRs and must turn to the courts to protect the property values of its members.  This can be time consuming and costly for HOA boards and members.

Given this new legislation, all developers and HOAs should review their CCRs to confirm that specific language empowering the HOA to impose fines on property owners for CCR violations is included.  If such authority is not clearly spelled out in the CCRs, then the developer or HOA should amend the CCRs to provide for the imposition of fines. In addition, HOA boards should adopt policies and procedures to make certain they are complying with new law’s requirements for notice and service to violating members.   


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