“If you want to operate a hotel – or use public lands, you have to pay to play”
HOA Detective™ | September 12, 2025: Today, we are going to contemplate a compliance standard for HOAs that operate as short‑term lodging or those located on public lands through a long-term land lease agreement with a state or federal agency.
The Question: Shouldn’t any homeowner association (HOA) that either (1) functions as a de facto hotel through widespread short‑term rentals (STRs), or (2) located on public land under a state or federal lease, be required to maintain 100%, verifiable compliance with every state, federal, and local law that touches the organization before any unit can be used for commercial purposes?
Of course, the only logical answer is an emphatic YES. In both instances, the public is exposed to real risks while private ownership interests benefit. This trade-off demands a “compliance first” rule. To provide proper context, consider the question:
“How many of the units in the Champlain Tower South Condominium were being occupied by one or more short-term tenants at the time of the collapse?
Why Short‑Term‑Rental HOAs Must Meet “place of lodging” Standards: When a condominium (or other HOA) legal framework includes a rental‑pool operation, it converts the property into a transient lodging (hotel) business. At that point, the legal obligations shift from those of a “privatized residential development” environment to those of a commercial enterprise.
Under Title III of the Americans with Disabilities Act (ADA), “places of lodging” include hotels, motels, inns, and other facilities offering rooms for short stays. Explicitly included under Title III are timeshares and condominiums when they operate like hotels (centralized reservations, housekeeping/linen service, non‑specific unit bookings, etc.). Once a property crosses that line, accessibility, reservations, and other Title III obligations attach to the entity that owns, operates, leases, or leases to that place of lodging.
Local Law Enforcement: As a rule, local laws and ordinances reinforce the ADA and Title III. Cities typically require permits to establish transient lodging and impose occupancy taxes, with building, fire, and life‑safety reviews geared to transient use. Building codes further serve to brighten the line between privatized residential occupancies and that of the “place of lodging” environment: transient lodging is Group R‑1 (hotels and motels), while apartments and other non‑transient housing are Group R‑2. You don’t get to market nightly stays while hiding behind an R‑2 envelope designed for stable, residential occupancy. If an HOA operates in the R‑1 world in substance, it should be reviewed and regulated as such.
The Proposed Standard is Simple: if the HOA’s rental model (including pooled rental programs or rules that force periodic renting) makes the property a de facto lodging establishment, then the Association must demonstrate current, complete compliance with ADA Title III (as applicable), state lodging rules, local permits, tax collection and remittance, fire/life‑safety inspections, and other conditions attached to transient occupancy. Until that proof exists, no unit should be offered to the public.
When the subject property is organized as a condominium or a planned unit development (P.U.D.), all provisions of the state laws that govern such legal entities MUST be followed WITHOUT exception.
No License, No Car: You can’t drive a car on public roads unless you have a valid license, current registration, and insurance. If a licensed real estate agent or building contractor allows their license to lapse, or the license is suspended, the licensee is immediately prevented from engaging in the “professional activity” otherwise permitted by the license. It doesn’t matter if the contractor has a mortgage to pay or the real estate agent has a lucrative deal set to close. If you are found to be out of compliance for any reason, and your license status is compromised, you are OUT OF BUSINESS until such time you sort out your compliance issues!
The SAME legal standard should be applied to all condominiums, townhomes, and detached single-family homes located within HOAs, which are being used as STRs, unless the HOA in question is found to be in full compliance, 100% of the time.
Must Rent Requirement: Some condominiums have a “must rent” clause in the CC&Rs, or a clause that prohibits the owner from living in the unit full-time, requiring instead that the owner make the unit available as a STR for a minimum number of nights each year. Functionally, and legally speaking, these regimes are lodging businesses wrapped in a common‑interest shell. The stricter standard above is not only appropriate, it is necessary for the sake of public safety, insurability, and economic sustainability. If an HOA deliberately channels units into the tourist market, it should accept the obligations that come with it, just like any other lodging enterprise.
Public Land Lessees: It’s simple – compliance should NOT be optional! Consider condominiums and marinas located on submerged lands along the rivers and coastlines in numerous states, from Hawaii to Florida and almost every state in between. These facilities are often located on state‑owned trust lands leased from the Department of State Lands (DSL). The public retains trust rights in these waterways – including navigation, commerce, fishing, and recreation. DSL’s rules typically make conformance with local, state, and federal laws an express factor in approvals and provide for termination of the lease upon default. In other words, public‑land lessees don’t just owe rent – they owe compliance to the public that owns the land. This legal principle should apply when it comes to all state statutes and local ordinances.
The same bright‑line rule fits here: if an HOA benefits from the privilege of occupying public land, it should be demonstrably compliant with every applicable law and lease condition. Otherwise, no commercial use (STRs, transient moorage, venue rentals, fee‑based amenities) until the house is in order. This protects the public trust and avoids the quiet privatization of public benefits.
Compliance First Policy: Full and unwavering compliance should be the first step in ensuring public safety and the rights of all citizens. Why be so strict? Because the externalities are real. Transient guests deserve accessibility, egress, and fire/life‑safety protections calibrated for the STR environment and a public often unfamiliar with a building in which they choose to sleep. Meanwhile, the STR occupancy benefits the owner by creating a profit opportunity. Neighbors deserve responsible density and tax compliance that funds local services.
When the land is publicly owned, but set aside for private use by contractual agreement, the broader community has an interest in safe, lawful, and non‑exclusive use. A compliance‑first policy turns these interests into a gate: operate commercially only when you can prove you meet the rules.
The Counterarguments: No doubt this game-changing proposal will engender no small amount of pushback from those vested in maintaining the status quo. To borrow a line from Samuel L. Jackson’s character in Pulp Fiction, “Allow me to retort: “
- “We are a condo, not a hotel” – Sorry, the reality is that labels don’t control this narrative; functionality does. If you advertise nightly stays, run a front desk or centralized reservation system, provide housekeeping/linen service, and rotate guests through multiple similar units, you’re acting like a hotel. The ADA and local rules were written to capture exactly that scenario.
- “We can’t afford full compliance” – Again, no sympathy. If you can’t afford the cost of compliance, you can’t afford to be in the lodging business. Simple as that. Can one imagine a situation where the Hilton Hotel owners tried to argue that they could not afford the cost of fire safety in their network of hotels? Of course not! The answer isn’t to externalize risk by passing it along to guests, neighbors, and the public. The answer is to scale back commercial use until you can meet the standards. In other words, pay the fire inspector and raise your rack rate, or amend your governing documents to align with a residential, non-commercial use case.
Champlain Tower South STR Status: In the wake of the 2021 collapse of Champlain Towers South Condominium (CTSC) in Surfside, Florida, questions like “How many units were used as short‑term rentals?” are understandable. Public reporting to date has focused on structural causation and regulatory reform, not on quantifying STR activity in the building. Reliable information regarding the STR status at the time of the collapse has not been identified. Absent any hard, reliable evidence, it is better not to speculate.
The Broader Lesson: When buildings function as lodging, compliance needs to be verified up front, consistently, and with certainty. There must be meaningful consequences for noncompliance. Otherwise, it is only a matter of time before the next CTSC comes crashing down. Public policy should seek to adopt and enforce a simple compliance gate across both property categories:
- If the HOA operates as lodging, demand full compliance with ADA Title III (as applicable), local transient‑lodging permits, occupancy taxes, and fire/building requirements consistent with transient use before any unit is offered for short stays, and all statutes that govern condominiums and P.U.D.s in the state in question.
- If the HOA occupies leased public land, it requires full compliance with all lease terms and all applicable laws. Demand an acknowledgement of the duty of public trust before permitting any commercial or private use of public lands
No Compliance, No Commerce. This is how we align private revenue-generating activity with public safety and the property rights of “we the people” – on public coastlines, along rivers, and anywhere common‑interest communities blend into U.S. waterways; or when the benign “condo association” down the street ventures into the business of operating a hotel!
Because You’re Buying More Than a Home!
Sources
• 28 C.F.R. Part 36 (ADA Title III regulations): https://www.ecfr.gov/current/title-28/chapter-I/part-36
• DOJ Fact Sheet – Timeshares & Condominium Hotels as Places of Lodging: https://archive.ada.gov/regs2010/factsheets/title3_factsheet.html
• ADA National Network – Accessible Lodging (definition of ‘place of lodging’): https://adata.org/factsheet/accessible-lodging
• 2010 ADA Standards for Accessible Design: https://www.ada.gov/law-and-regs/design-standards/2010-stds/
• International Building Code – Group R-1 vs R-2 (2021): https://codes.iccsafe.org/s/IBC2021P1/chapter-3-occupancy-classification-and-use/IBC2021P1-Ch03-Sec310.2
• City of Portland – Chapter 24.31 Transient Lodging (permits & safety): https://www.portland.gov/code/24/31
• City of Portland – Transient Lodgings Tax Program: https://www.portland.gov/revenue/transient-lodgings-tax
• OAR 141-125-0140 (DSL – conformance with laws for leases): https://www.law.cornell.edu/regulations/oregon/OAR-141-125-0140
• OAR 141-125-0190 (DSL – termination for default): https://www.law.cornell.edu/regulations/oregon/OAR-141-125-0190
• Oregon Department of State Lands – Public Trust Doctrine overview (PDF): https://www.oregon.gov/dsl/waterways/Documents/Public_Trust_Doctrine.pdf
• NIST preliminary finding (pool‑deck origin) via WLRN reporting: https://www.wlrn.org/government-politics/2025-09-09/nist-surfside-collapse-cause-champlain-towers-south
