Arizona has one of the highest rates of residential homes in homeowners associations (HOAs) throughout the nation. If you own a property that is a part of an HOA, it’s imperative that you understand all the HOA laws that you must abide by, especially if you plan to rent the property out to another party. Arizona’s laws regarding short-term rentals (STRs) can be confusing and restrictive. You may be wondering, “Can my Scottsdale HOA legally ban Airbnb and short-term rentals?”
HOAs technically can ban short-term rentals through their covenants, conditions, and restrictions (CC&Rs) if such a provision is included in the original CC&Rs or properly adopted via an amendment to the CC&Rs. We have found, however, that many such amendments are not legal under Arizona law. If you plan to use your property for Airbnb or another STR option, you need to know the applicable state HOA laws. A Scottsdale HOA attorney from Harper Hall PLC can explain these laws and represent your interests throughout your HOA case.
HOA Laws on Short-Term Rentals, Like Airbnb
Across the United States, it’s estimated that around 40 million homes live in HOA communities. More than 80 percent of new homes sold across the country have been a part of these associations. In Arizona, specifically, nearly one-third of residential homes are part of HOAs. In recent years, approximately 16.2 percent of households were responsible for paying HOA fees.
At their core, HOAs are intended to make homeowners’ lives easier. Unfortunately, it’s not uncommon for disputes to arise between homeowners and HOAs. This is especially true if you want to use your property for something other than your primary residence.
While there are state laws and city laws preventing the city from interfering with homeowners in certain matters, you can still run into trouble with your HOA. HOAs are private organizations that are governed by the contracts they enter into with individual homeowners. This contract includes CC&Rs that override municipal codes.
Therefore, state laws that limit government entities from restricting or prohibiting short-term rentals don’t apply to them. Short-term residential rentals include rental stays for less than 30 days. You must obtain several licenses to run an STR in Scottdale.
These include an annual city license and a Transaction Privilege Tax (TPT) license. Any short-term rental properties must be registered with Maricopa County, too. In addition to obtaining and maintaining all the right documentation, property owners must comply with health, safety, and neighborhood notification requirements.
Additionally, although the city can’t prohibit STRs, it can still impose its own restrictions. The Scottsdale City Council has approved new regulations to prevent disruptions caused by short-term rental activity.
Under these updated regulations, the city can hold property owners responsible for nuisance parties. This applies to property owners managing both short-term and long-term rentals. Local law enforcement also has the authority to remove nonresidents from the property. Lastly, minors are now barred from renting STRs. STR hosts also face certain tax implications. It’s imperative that you follow all laws and regulations if you plan to rent your property out.
FAQs
What Is the Arizona Transaction Privilege Tax (TPT)?
The Arizona transaction privilege tax is placed on vendors for conducting business in Arizona. Any income from short-term rental stays used to be subject to Arizona TPT. If you intend to operate a short-term rental property, you must obtain a TPT license.
As of January 2025, property owners are no longer charged TPT on long-term rentals. Additionally, business owners under the age of 19 don’t need a license unless they generate more than $10,000 in gross income.
What Are the Most Common Restrictions HOAs Impose on Short-Term Rentals in Scottsdale?
The most common restrictions HOAs impose on short-term rentals in Scottsdale are intended to deter property owners from renting out the property at all. HOAs often attempt to impose strict rules and regulations or even ban them outright through their CC&Rs or rules adopted by the Board. Common restrictions include:
- Common area restrictions
- Lengthy approval processes
- Limited number of rentals per year
- Minimum stay requirements
- Rental caps
What Are the Requirements for Owning a Short-Term Rental Property in Scottsdale?
The requirements for owning a short-term rental property in Scottsdale start with obtaining a city license for the property and renewing it annually. The City of Scottsdale requires an additional license beyond state and county requirements.
Be sure to review all requirements at the county level, too. Properties must be registered with Maricopa County. It’s the property owner’s responsibility to keep records updated.
Can the City Prohibit Short-Term Rentals in Scottsdale?
No, the city cannot prohibit short-term rentals in Scottsdale. However, it can still impose serious restrictions, even if it can’t ban them outright. Local governments can still regulate:
- Civil penalties
- Permit suspensions
- Health and safety requirements
- Insurance requirements
- Noise, parking, and nuisance enforcement
- Permits
- Licensing
- Tax compliance
Furthermore, individual homeowners’ associations may attempt to impose their own rules and regulations to make it difficult, if not impossible, to keep a short-term rental property. We have found that many of these efforts by HOA’s are invalid under the terms of the association’s governing documents and Arizona law.
Hire an HOA Lawyer in Scottsdale to Handle Your Situation
If you’re facing legal issues with your HOA, it’s recommended that you hire an HOA lawyer with experience in navigating cases like yours. Our attorneys at Harper Hall PLC manage complex legal matters related to real estate and property ownership throughout Maricopa County and beyond.
Our team has nearly three decades of experience working with clients across Arizona, providing quality legal solutions for Arizona homeowners. We are deeply familiar with state HOA laws, and we know how to navigate disputes through the Arizona Department of Real Estate. Our attorneys can also take a case to court if matters escalate to litigation.
If the scope of losses exceeds that of the administrative process, you can file a claim with the appropriate Superior Court or District Court. After reviewing your case, a Scottsdale HOA attorney from our firm can represent you throughout the process. Contact the office to schedule a consultation with a member of our team. You can find us in the Heritage Marketplace on the corner of Vaughn Avenue and Gilbert Road.
