Heber City residents using their houses as short-term rentals could lose their business licenses if their neighborhoods’ homeowners associations have rules against the practice.
City code concerning the rentals has long been a subject of discussion for the Heber City Council, which revisited the topic in recent months after receiving a slew of concerns from people worried that their neighbors were illegally renting out property.
Until Tuesday, in order for someone to be permitted to offer a short-term rental, it was necessary for the city to receive a letter of consent from their homeowners association if their property was governed by one.
In previous meetings, councilors discussed ways they could ensure that property owners are following their HOA’s rules regarding short-term rentals, but found several solutions could end up with the city needing to adjudicate disagreements between the associations and individual property owners.
Yet, Councilors Ryan Stack and Rachel Kahler argued, not requiring HOA approval for a property owner to receive a business license would be unlikely to provide enough protection to neighborhoods that have determined they do not want to host short-term rentals.
“Last time, there was some discussion about maybe an in-between compromise,” Heber City Attorney Jeremy Cook said. “After speaking with staff, we felt like staff would still prefer something other than what exists today.”
He presented the council with two options — remove the HOA requirement for consent letters or “allow HOAs to notify the city that they have restrictions on short-term rentals.”
This compromise, he said, requires the HOA to be proactive in a permit discussion, thereby proving the group actively exists and has rules regulating short-term rentals.
“If they do, then the city won’t issue business licenses,” he said. “If the city’s already issued a business license, the city will notify that licensee that their license will be revoked four months after that notice.”
City Councilor Yvonne Barney asked what makes an HOA active and how often board members are elected.
To notify the city of rules against short-term rentals, Cook answered, HOAs would need to submit a map, show they are registered with the Utah Department of Commerce, provide the rules regulating short-term rentals, and give a verified statement of authority from the person signing the notice and that individual’s name and contact information.
The four-month period in which an individual would be notified of their pending business license revocation could also double to give enough time for someone to dispute the HOA’s authenticity, Cook said.
“Part of this is putting some burden on the person saying we really do have authority to do this,” Cook said. “There’s a lot of HOAs out there that are active, that have boards, that are going to do this. They’re going to provide us a map, and we’re going to restrict all the short-term rentals. We’re not going to issue business licenses for anybody in those neighborhoods. There’s some areas out there where it’s questionable, and I’d prefer to put the burden on those HOAs to tell us that these are restricted.”
Councilors Mike Johnston and Ryan Stack agreed with the compromise.
Johnston recalled when he first built his home, and two men he didn’t know at the time showed up and told him he needed to submit his plans to an HOA he didn’t know existed and soon learned was relatively inactive.
“It bothered me,” he said.
Realizing he’d obtained the permits he needed from the city, he moved on with his plans without submitting them. Years later, someone in his position sued the alleged HOA that kept requesting plans, and a judge determined the administration was defunct because it wasn’t run according to state code.
“That was a civil matter between parties,” he said. “The city didn’t have to get involved. … If someone wants to make that claim that their HOA is defunct, well then, let them litigate that in court. I don’t want to be involved as a city.”
Stack wanted to make sure HOAs were notified of the change.
“My one request would be if the council adopts this compromise option, that the city is proactive in notifying all the HOAs,” Stack said. “I would like to see us be proactive in notifying the HOAs in the city about this.”
The change dissolving the letter requirement and allowing HOAs to reach out to the city with their rules about short-term rentals received a unanimous vote.