Amendment of CC&Rs to Prohibit Short-Term Rentals

Question: In last week’s column you said that 51% of the neighbors in a Phoenix neighborhood could not agree to prohibit short-term rentals in their neighborhood. This Phoenix neighborhood had no CC&Rs. Therefore, many readers of your column might think that their Phoenix neighborhood cannot prohibit short-term rentals. In fact, most Phoenix neighborhoods have CC&Rs which can be amended by the homeowners to prohibit short-term rentals. The voting requirement to amend the CC&Rs can be as low as 51% of the homeowners. Our Phoenix neighborhood has CC&Rs that allow amendments by 51% of the homeowners, and we recently amended our CC&Rs to prohibit short-term rentals. You should clarify your answer in a future column.

Answer: Thank you for your comments. You are correct that, if your Phoenix neighborhood has CC&Rs that provide that 51% of the homeowners in the neighborhood can amend the CC&Rs, then an amendment restricting short-term rentals signed by 51% of the homeowners should be enforceable against all homeowners in the neighborhood.

I am sure that you have recorded this amendment, which gives constructive notice of the amendment to all homeowners in your Phoenix neighborhood. If you are concerned about homeowners still doing short-term rentals because they are not aware of this amendment, I would suggest that you also send a copy of the amendment both by first class mail and by certified mail to those homeowners.

Finally, you are correct that most developers who develop subdivisions in Phoenix, or anywhere else, do record CC&Rs to govern the subdivision. The reason is that the developers want to control the subdivision until at least a majority of the homes in the subdivision are sold, e.g., the developer doesn’t want the first two homes that are sold to be painted pink! You are not correct, however, that most Phoenix homeowners are subject to CC&Rs. My understanding is that Scottsdale has a larger percentage of homeowners subject to CC&Rs than Phoenix does, but a majority of homeowners in Scottsdale are still not subject to CC&Rs.

Note: If the first class mail is not returned, it is legally presumed to have been received. If the certified mail is signed for, you then have actual receipt. If the certified mail is returned as undeliverable, however, the legal presumption is no receipt of the certified mail.

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