Rental Term Amendment
In recent years Continental has seen a significant increase in the number of homes being rented primarily through websites such as Airbnb and Vacation Rental by Owner (VRBO). While a number of these short-term rental owners comply with Continental’s CC&Rs and Rules and Regulations, others fail to set any standards for their renters, resulting in real problems for the Homeowners near these properties.
In 2012, the Board approached Homeowners with a request to approve an amendment to limit all leases for a minimum of thirty (30) days. This appeal did not receive the required 2/3 vote.
In January 2019, the Board approached the Homeowners with a second request to approve an amendment to limit all leases to a minimum of thirty (30) days. This amendment included two (2) additional amendments to the CC&Rs and all three did not receive the required 2/3 vote.
Over time the complaints about noise, large parties and trash related to the short-term rentals continued to rise. In November 2019, a non-binding survey was sent to all Homeowners. The survey sought to understand whether Homeowners would support an amendment to our CC&Rs to limit rental periods to a minimum of 30 consecutive days for single family homes. 729 Single Family Homeowners responded to the survey with 502 indicating they would support the amendment and 227 indicating they would not support the amendment.
As set forth in The Amended and Unified Declaration of Continental Country Club, Inc. (Document #3399677 recorded on 08/25/2006 section 15)(“Unified Declaration”), “All changes to these Restrictions shall require the written approval of the owners of two-thirds (2/3) of the lots in the Subdivisions and two-thirds (2/3) of the Association’s Board of Directors.” At the June 2020 Board Meeting, the Board unanimously approved the proposed change to the Unified Declaration requiring a minimum 30-day lease, as set forth on the Consent Form that is being provided to all Homeowners subject to the Unified Declaration.
The next step following the Board of Directors approval based on the homeowners’ response to the November 2019 survey was a Consent Form sent to all Owners subject to Unified Declaration. The consent form was a single topic item to amend the Unified Declaration to restrict rentals to no less than thirty (30) consecutive days. Consent by two-thirds (2/3) of the lots subject to the Unified Declaration (or 807 lots) is required for the amendment to be adopted.
An Official Count was held at 9am on September 28th to count the Written Consent Forms. The Association received a total of 1,168 written consent forms of those 809 were approvals, therefore the amendment passed. The next steps were for the Certificate of First Amendment to the Amended and Unified Declaration of Restrictions Continental Country Club be signed and recorded in Coconino County.
Brick House Trust (“Plaintiff”) filed a complaint against the individual members of the Board of Directors (“Board”) for Continental Country Club, Inc. (“Association”) alleging that the Board had violated the Association’s Declaration, Bylaws, and Arizona law when it adopted the Rules and Fines Schedule. The Plaintiff further alleged that the Bylaws do not permit the Board to amend the Declaration by “written consent” unless and until it complies with A.R.S. § 33-1812 and A.R.S. § 33-1817.
Following the recent Supreme Court of the State of Arizona ruling in the case No. 2 CA-CV 2019-0106 Calabria Ranch HOA, LLC vs. Maarten Kalway, on June 14, 2022, after oral argument on Plaintiff’s Motion for Judgment on the Pleadings regarding its Claim for Declaratory Relief, the Court found that Section 26(a) of the Amendment recorded with the Coconino County Recorder’s Office on September 29, 2021, at Document No. 3929838, is invalid and stricken from the Amendment.
Brick House Trust v. Continental Country Club, Inc. Association, Coconino County Court Case No. S0300CV202100446. This is still an ongoing case, with rights of appeal upon the conclusion of the case.