A Claiborne County judge made a decision on vacation rentals for a Norris Lake neighborhood. According to the March ruling, the covenants were too vague for the HOA to ban short-term vacation rentals. The HOA board has appealed the court ruling while the neighborhood residents are divided on the issue.
Decision on Vacation Rentals
In March, a Claiborne County judge ruled that the HOA’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) was too vague for the HOA to forbid short-term vacation rentals (STVRs) in the community. However, the HOA board in Lone Mountain Shores appealed the court ruling in April. Meanwhile, the residents of the planned community with 165 homes are divided. Some residents want short-term rentals and some do not.
Both sides think allowing or banning STVRs alters the neighborhood fundamentally. David Izbrand, the HOA president, has stated that the biggest concern is that people would buy lots and build tiny homes just to rent them out. According to Izbrand, the community is residential and a lot of people live there full-time.
Multiple residents rent out STVRs in the community to pay for a second or third mortgage. According to them, the court decision on vacation rentals agreed that limiting the homes to “single-family residential purposes” could include tenants who use their properties like homes.
The previous HOA president pledged that they would not use HOA funds to file an appeal but resigned after the other directors supported the push in a vote. Izbrand is the successor of the former president. He states that the appeal is another means to resolve the conflict. The community is split on whether the decision on vacation rentals is good or bad.
The HOA Board Must Stop Limiting Rentals
The HOA board gathered people from both sides of the argument to determine a ballot measure that could clarify the community’s rules. However, the panel could not settle on a percentage that would designate part of the lots to be rented short-term. The board proceeded with a separate ballot that would grandfather in homeowners presently renting while forbidding all STVRs after the properties were sold.
According to Izbrand, the renters could still get their investment’s worth, and the neighborhood could move on. However, on June 26, Chancellor Elizabeth Asbury granted a temporary injunction that stopped the vote after she reviewed allegations that the association let members cast more votes than the bylaws permitted.
The attorney for the pro-renter homeowners, Ryan Sarr, believes the grandfather clause was illegitimate. In November 2022, several homeowners stopped renting after the board took legal action against two dozen members who rented their units short-term. According to Sarr, they wouldn’t be grandfathered in because they could not provide receipts for the rentals over the previous year.
Conflict Over Ballots
Sarr and his clients say that multiple members were allowed to cast more votes than what’s allowed under the bylaws. While members can cast one vote per lot (and only one vote for those lots combined for tax reasons), the president said the bylaws allow each member one vote per lot for which they pay assessments.
Unfortunately, the rental ballot must wait until after an August 26 hearing. By then, the judge would grant the association’s request for arbitration or extend the freeze on the ballot vote. Meanwhile, pro-renter homeowners are requesting the court to review the results of an HOA election last fall. They asked to appoint Fred Maess, the presidential candidate who lost by a few votes.
The Lone Mountain Shores homeowners are divided evenly between anti-renters and pro-renters. According to Maess, one way to end the conflict is a legal voting process to enact rental restrictions based on neighbor input. A fair vote would mean the community had to accept the results regardless of whether they liked the outcome.
