Idaho Legislature Acts on Rental Restrictions

I previously discussed the Idaho Supreme Court’s Adams v. Kimberley One Townhouse decision in two different blog posts (https://lucentlawcom.wpenginepowered.com/ccr-amendment-idaho-supreme-court-favors-hoa-over-homeowner/ and https://lucentlawcom.wpenginepowered.com/hoa-rental-restrictions-are-they-valid/). In short, the Adams decision concluded that HOA covenants could be amended to impose restrictions or prohibitions on short-term rentals by owners through the general process provided in the covenants for enacting amendments.

The Idaho legislature responded to the Adams decision in the 2022 session. In the process of pulling together all of Idaho’s statutes relating to homeowners associations into a single act, the Homeowner’s Association Act, Idaho Code Ch. 55, Ch. 32, the legislature also added a new statute prohibiting rental restrictions without the consent of the owners affected by the restriction.

Idaho Code Sec. 55-3211 reads: 

PROHIBITED CONDUCT — RENTAL RESTRICTIONS. No homeowner’s association may add, amend, or enforce any covenant, condition, or restriction in such a way that limits or prohibits the rental, for any amount of time, of any property, land, or structure thereon within the jurisdiction of the homeowner’s association unless expressly agreed to in writing at the time of such addition or amendment by the owner of the affected property. Nothing in this section shall be construed to prevent the enforcement of valid covenants, conditions, or restrictions limiting a property owner’s right to transfer his interest in land or the structures thereon as long as that covenant, condition, or restriction applied to the property at the time the homeowner acquired his interest in the property.

This statute completely reverses the law in Idaho on this topic. It also appears the legislature intended to override the terms of any HOA covenants that allow for amendment of covenants as to rental restrictions based on a less-than-unanimous vote – covenants often allow for amendments to be adopted by a majority or supermajority (e.g., two-thirds or 75% approval) vote.

It will be interesting to see if this statute gets tested through litigation over the meaning of “unless expressly agreed to in writing at the time of such addition or amendment by the owner of the affected property.” For example, if the covenants explicitly allow for the board of the HOA to restrict rentals, do the homeowners still have to approve such restrictions in writing if the board wishes to exercise its authority? That certainly seems to be the case.