CAN A BACKYARD BBQ DOUBLE AS A SIDE GIG?

By Reggie Schubert, Esq.

In today’s world of an ever-expanding gig economy, it has become second nature to avail oneself of the conveniences offered by creative entrepreneurs who are offering their goods and services through a website or app. Many of us have participated in this type of on-demand marketplace transaction when buying or selling goods online, hiring a ride, or ordering groceries for delivery to our front door. The common interest development industry is all too familiar with the effects of vacation or similar short-term rentals.

This era of enterprising business has now brought yet another new concept made feasible using a combination of an online technology platform and occupants of residential property who are willing to hire out the use of a backyard, pool, private park, parking space, or other popular amenities on a daily or even hourly basis.

Sniffspot and Swimply are tradenames of fairly new apps that have been developed with this concept in mind. Sniffspot is targeted to dog owners looking for yard space for their pet. Swimply offers hosts a platform to rent out their pools to the apps’ users. There is no shortage of apps like Parking Cupid, Pavemint, SpotHero and ParkingForMe, just to name a few, which have become popular platforms for on-demand parking.

While this type of amenity rental concept is certainly creative, it brings with it potential problems and pitfalls, especially when it occurs in a common interest development. Several of the many benefits of living in a common interest development, including quality of life and the ability to use and enjoy association amenities, could be threatened if only a handful of residents decide to hire out the use of association amenities or even their own backyards.

Imagine the problems that could arise from the hourly rental of an association pool to an unknown group for a party or similar social gathering. Likewise, the coming and going of large groups of people into and out of a community to make use of a private backyard could cause noise, parking, trash, and other problems for nearby residents.

The potential costs, nuisance, and liability exposure that an association could face would likely cause a significant uproar in the community, and rightly so. It is easy enough to identify potential nuisances such as noise, trash, and parking burdens that could result from unauthorized amenity rentals. But there would also likely be added costs of clean up, maintenance, security and perhaps even liability for injury sustained within association owned common area. And finally, amenity rentals to the public might subject the association to federal and state accessibility laws.

Some may argue that owners have a right to host guests at both common amenities and at their separate interest. It would be hard to argue that an association cannot set rules and regulations for the appropriate use of common amenities. The case for owners having a right to allow “guests” (a.k.a. paid users) onto their separate interest backyard is somewhat more grounded. However, owners’ right to their residence is not unfettered. Owners’ rights to their property should not pre-empt an association’s right to enforce reasonable restrictions and rules addressing the conduct involved in daily or hourly rental of an owner’s backyard or other part of the owner’s separate interest.

California case law is instructive. In Colony Hill v. Ghamaty (143 Cal.App.4th 1156 (2006)), the court ruled the owner was engaged in prohibited commercial activity for uses including renting portions of his unit amounting to other than single-family dwelling purposes (See Civil Code §4741(e) allowing owner occupied rentals).

Associations should take appropriate action now in order to discourage or otherwise manage these potential risks. Fortunately, many associations already have restrictions contained in their CC&Rs and operating rules that will likely be useful in this effort. Typically, CC&Rs contain a prohibition against commercial activities and activities that result in an increase in insurance premiums as well as nuisance provisions that a board may rely upon in addressing unauthorized amenity rentals as well as prohibited uses of an owner’s separate interest.

Updated and meaningful fine and enforcement policies should be in place as tools in the board and manager’s toolbox to allow a proactive approach to address such unauthorized uses of either amenities or an owner’s separate interest. As with adoption of any rule, care should be exercised to ensure that such rules do not conflict with an association’s CC&Rs or bylaws and that proper authority is provided for in the CC&Rs or bylaws for adopting rules (See CA Civil Code §§4350, 4360).

Accordingly, appropriate operating rules may be considered to bolster and clarify existing restrictions. Such rules should address: (1) use of amenities and number and procedures for guests allowed; (2) clarification as to prohibited commercial activities to prohibit this type of amenity and separate interest rentals; and (3) appropriate enforcement and disciplinary policies.

Although we may see an increase in popularity of apps such as Sniffspot and Swimply, an association can be proactive by reviewing current restrictions and adopting new rules or restrictions that prohibit certain activities associated with this type of unauthorized amenity and separate interest rentals.

Reggie Schubert, Esq., is a founding partner at McGuire Schubert Sohal LLP and serves as general counsel to common interest developments throughout California. He has been in practice since 2003.