CAI-NJ Feb.2018

SHORT-TERM... from page 23.

to week, or even month to month. Community associations are classified and rated with the assumption that they are considered to be annual stays (assuming that a lease is a mini- mum of one year). Most insurance carriers hate the idea of short-term rentals and as an insurance broker, we recommend against your community association allowing them. However, prohibiting residents from making easy money just by renting out their unit while they are away on a vacation of their own is not as easy as it sounds either. As many of our CAI-NJ experts will tell you, getting anything added to a community association’s governing doc- uments can be a challenge. Getting the community association’s board, or the entire community, to agree on allowing or prohibiting short-term rentals is gener- ally the first step. The next step is having that decision put into the community association’s master deed, bylaws, or rules and regulations. For the sake of this article, we will say the association agreed to move forward and allow short-term rentals in their community or building. The next step is to make sure that, in the community association’s governing documents, a requirement is added that any owner who is participat- ing in the short-term rental of their unit, must carry the correct insurance in order to properly protect the parties involved. Airbnb offers a policy called “Host Protection Coverage,” but many insur- ance carriers refer to it as “Short-Term Vacation Rental Insurance.” These spe- cially designed policies are for unit

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