The COVID-19 pandemic is forcing people across the world to look for new forms of entertainment because of restrictions placed on large crowds. One idea that has taken off during the pandemic, perhaps as a response to many public pools being closed, is homeowners renting out their private pools by the hour through an online, app-based service. But how does this work in a property owners association (POA), and what potential problems and risks may arise for a POA?
What is Swimply?
Called the AirBnB of pools, Swimply is an app service that allows homeowners to rent out their private pools by the hour. The service was founded in 2018 and the app launched in 2019. It can now be used in almost 30 states, Canada, and Australia. The average rate for Swimply rentals ranges from $40 to $60 per hour, so it can provide a relatively inexpensive afternoon for groups of people looking to get out of their homes during the ongoing pandemic. Within the app, the host (homeowner) sets the rules of use, including access to the property and pool, the number of guests permitted, if pets are welcome, whether alcohol is allowed, and more. Swimply has also implemented rules to address COVID-19, including limiting the number of guests to only eight. With all of these rules already in place from the app, what could possibly go wrong for a POA?
Concerns for POAs
Let’s begin by addressing liability concerns, which should always be a consideration for a POA. Could a POA potentially find itself liable for injuries or damages sustained by a guest who rents a pool within a POA through Swimply?
While liability on the part of a POA seems unlikely under this scenario, there is nothing to prevent a Swimply renter from asserting a claim against a POA if a guest is injured or sustains damages while using a rented pool or traversing the community to access the host’s residence. To protect itself from liability, Swimply currently requires renters to sign a liability waiver before using the app service, and it is exploring adding a $2 million insurance policy within the next year. Who and what will be covered by the insurance policy is not yet known. Swimply also instructs a host to review his or her homeowner’s insurance policy before joining the site. Still, if a serious accident or injury occurs and there is not adequate coverage under the Swimply policy or the host’s policy, an injured party will certainly look for other avenues of recovery, and this might include the POA. Even if claims against a POA are ultimately found to be without merit, a POA can incur time and expenses associated with defending against the action.
Another concern for a POA may be whether it can be fined for a Swimply host’s violations of local or state mandated rules related to COVID-19. Fortunately, the short answer is no. It is the responsibility of the homeowner to ensure compliance with and enforcement of government-mandated COVID-19 rules when engaging in Swimply rentals.
Other issues a POA may face related to Swimply rentals are very similar to those caused by the short-term rentals of homes: excess noise, vehicles, traffic, and trash.
Like the short-term rental of a residence, many Swimply rentals may be unsupervised. A renter who has leased a pool for the day could easily bring more guests than permitted by the rental agreement. This will inevitably lead to an increase in noise, vehicles, and traffic in the neighborhood, which can be a nuisance to neighbors in an otherwise quiet community. Swimply renters will likely be unaware of rules and regulations the community has in place, such as parking restrictions, and congestion on residential streets may result. Additionally, as we occasionally find with short-term rentals, people who do not have a vested interest in a community may be much less concerned about trash left behind or damage to neighboring properties than owners and long-term residents.
There is another negative effect that Swimply rentals may bring to a POA. According to USA Today, 80 percent of the pools listed on Swimply have access to a bathroom as a part of the amenities. For those that do not, USA Today reports the company will work with the host to provide portable facilities. What “portable facilities” means is not specifically stated. No matter what these portable facilities are, they present a substantial concern for a POA, especially if it involves the delivery of port-a-potties. Neighbors will probably find the presence of a port-a-potty an unwelcome addition to the landscape, and the structure may violate the existing deed restrictions. In addition, if the port-a-potty is not properly serviced it may cause a health hazard.
How can a POA Regulate Apps Such as Swimply?
The best way to ensure a POA can stop hourly or short-term pool rentals is to have a specific prohibition against the practice in the restrictive covenants. A POA should consult with its counsel to determine whether the current language of the restrictive covenants is broad enough to prohibit such rentals. In some instances, a Board of Directors might have rule-making authority to prohibit such rentals; however, this must be reviewed on a case by case basis. In general, the best way to ensure that a restriction against hourly pool rentals is enforceable is to amend the restrictive covenants pursuant to a vote of the members. A POA’s legal counsel can provide recommendations related to appropriate wording for an amendment and the requirements for approval of same.
Looking to the Future
With the marketplace expanding almost daily, a POA must stay abreast of changing technology and apps that facilitate short-term rentals of not only a residence, but specific amenities on a lot. For example, Swimply is already promoting a new program called JoySpace that will be launched soon. JoySpace is described as “a platform for renting or sharing all kinds of unique private spaces from tennis and basketball courts to home gyms and decked out backyard.” This growing exchange for owners to monetize many aspects of their homes, sometimes for as little as one hour, may present serious negative effects for POAs if not addressed promptly. POAs should work with their legal counsel to determine how existing restrictions can be used to enforce potential violations and whether modifications are needed to address the ever-changing market for short-term rentals.