Out of Town Guests Could Find Airbnb Homes Slim Pickin’s in Texas

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Yeah, as slim and skinny as your turkey carcass is right about now. And the decision could affect Airbnb properties all over the state, which could mean those holiday guests stay with YOU!

The 4th Court of Appeals in San Antonio has ruled in favor of a San Antonio homeowners association screaming that a homeowner was violating deed restrictions when he rented out his house for short-term stays. As in what you do wth Airbnb.

Kenneth Tarr rented his San Antonio house about 31 times after being transferred to Houston in 2014. The property was in a deed-restricted neighborhood.

Residential use, it appears, means you cannot turn your home into a hotel whenever you need a little extra cash.

The appeals agreed that turning your home into a piggy bank with short term rentals violates a restriction in the deeds: properties must be for residential use only.

Are short term rentals a commercial use of your home?

“Short-term rentals, by their nature, are not residential,” Carroll (Frank Carroll, Houston-based attorney for the HOA) said.

The judge’s opinion, which conflicts with the ruling of a similar case in Austin, puts the legality of residential rentals of all sorts into question, said J. Patrick Sutton, the Austin-based attorney who argued for the homeowners in both cases.

“Conflicts with the ruling of a similar case in Austin.” This is interesting. I know that the homes along Swiss Avenue here in Dallas are deeded residential. That was part of the brouhaha with Aldredge House. I know that some folks living on Swiss have tried to run businesses out of their homes and have gotten slapped down by the neighbors.

Does this mean no one living within the Swiss Avenue Historic District can participate in Airbnb? Or anyone living in a neighborhood with deed restrictions that specify residential use only, as mine do?

Yes, if that San Antonio appeals court has its way.
Kenneth Tarr was apparently trying to make his San Antonio home cash flow after a job change took him to Houston. He now says he may appeal to the Texas Supreme Court, which seems like his only option after two conflicting rulings in the same state.
An appeal could potentially effect Texas homeowners who wish to rent out their properties short- or long-term.

The court did not specify a length of time, so attorneys say all types of leases could come into question.

“What tenant intends to remain permanently?” asked (J. Patrick, attorney for the defendant) Sutton?

Fifteen other states that have decided the issue have agreed with the appellate court in Austin, he said.

“Texas would be the only state that reads residential use to bar short-term rentals,” he said.

screenshot airbnb commercial
TV commercial run by HomeAway targeting Airbnb: who wants to share your home?
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Candy Evans

A real estate muckraker, Candy Evans is one of the nation’s leading real estate reporters. She is also the North Texas real estate editor for Forbes.com, CultureMap Dallas, Modern Luxury Dallas, & the Katy Trail Weekly. Candy has written for Joel Kotkin’s The New Geography, Inman Real Estate News, plus a host of national sites. Constantly breaking celebrity real estate news, she scooped former president George W. Bush's Dallas home in 2008. She is the founder and publisher of her signature CandysDirt.com, and SecondShelters.com, devoted to the vacation home market. Her verticals have won many awards, including Best Blog by the venerable National Association of Real Estate Editors, one of the nation’s oldest and most prestigious journalism associations. Candy holds an active Texas real estate license but does not sell. She is on the Board of Directors of Braemar Hotels & Resorts (BHR).

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