"Hotel or transient purposes." In June 2026, the Arizona Court of Appeals sided with a homeowners association on a short-term rental question, and it did so largely because those four words appeared in a declaration recorded back in 2009. Many neighborhoods do not have them. If you are buying in Scottsdale, the lines in the original covenants decide far more about whether the house next door can run as a nightly rental than any future city ordinance or HOA vote will.
Under the standard Arizona contract, you get a short window to find those lines.
Five Days and a Stack of Governing Documents
The February 2026 Arizona Association of REALTORS® residential purchase contract tells buyers to review the CC&Rs and all governing documents within five days of receiving them. The title company provides the recorded CC&Rs and deed restrictions. The seller has three days after acceptance to deliver a completed Seller's Property Disclosure Statement. The contract has no checkbox for short-term rental status.
The disclosure statement gets closer. Its February 2023 version asks whether the seller knows of "regulations surrounding length of time for rentals," and whether the property is currently leased. That question asks what the seller knows today. Whether a rule could be added later depends on the declaration's original wording, and only the documents themselves can tell you that.
For buyers who want quiet streets, this is where the issue gets settled. For buyers who plan to rent out a property, it is the same document read from the other direction.
Why Scottsdale City Hall Cannot Settle It
Arizona has prohibited cities from banning short-term rentals since Senate Bill 1350, which is now about a decade old. Under A.R.S. § 9-500.39, cities can still regulate licensing, health and safety, nuisances, neighbor notification and emergency contacts. Scottsdale has used that authority. In 2026 it focused on enforcement:
- License. Under a rule passed in October 2022, owners must hold a Scottsdale license for every property rented for less than 30 days. The rule also requires pool barriers, working smoke alarms and basic sanitation. City records showed roughly 3,000 licensed STRs as of July 2026.
- Events. Ordinance 4719 was on the June 23, 2026 council agenda. It adds an "Event Center" definition to city code. It is aimed at rentals that host weddings, conferences and other large gatherings. Ordinary residential get-togethers are not affected, and the fine is $1,000.
- Response time. Ordinance 4720 was on the August 24, 2026 agenda and replaces the city's penalty section for failing to respond to an emergency or complaint. Emergency contacts must now be reachable 24/7 and must arrive within an hour when public safety officials call them to an emergency. An unreachable contact faces a minimum $500 fine.
City records cited by Axios show about 370 online complaints about short-term rentals through July 2026, compared with about 670 for all of 2025. Arizonans for Responsible Tourism has said the new ordinance defines "complaint" too broadly and could make emergency contacts personally liable.
All of these rules govern how a rental operates. None of them decides whether it is allowed to exist. In 2024, a Scottsdale assistant city manager told ABC15 that rentals are permitted in single-family neighborhoods unless private agreements such as deed restrictions say otherwise. That leaves the decision with private agreements.
What Arizona Courts Keep Reading
State statute gives owners the starting point. For planned communities, A.R.S. § 33-1806.01 says a member may rent unless the declaration prohibits it, and must follow the declaration's rental-time restrictions. Condominiums have a parallel rule in § 33-1260.01, enacted in 2014.
The next question is whether an HOA can add a restriction after you buy. In Kalway v. Calabria Ranch HOA, filed March 22, 2022, the Arizona Supreme Court held that a general amendment clause does not let a majority impose any new restriction it chooses. A non-unanimous amendment has to be reasonably foreseeable from the original declaration and tied to an existing covenant. It may refine a covenant, correct an error or fill a gap. Kalway itself was about building size, livestock and similar rules. In the four years since, the Court of Appeals has applied its test to rentals again and again, and the outcomes follow the original wording.
| Case | Decided | What the original documents said | Outcome |
|---|---|---|---|
| Preston v. Las Sendas | Oct. 31, 2023 | Use "as a residence," no detectable business, no "hotel or [on] some other transient basis" | Vacation-rental ban and 31-day minimum upheld |
| Village of Oakcreek v. Bonham | Oct. 3, 2023 | Generic no-business clause | HOA's suit to enforce an STR ban dismissed |
| Vista Del Corazon v. Smith | Mar. 8, 2024 | 1997 CC&Rs without the needed notice | 90-day rental restriction unenforceable |
| Gross v. The Shores at Rainbow Lake | Oct. 10, 2024 | No duration limit, and short stays expressly permitted | 30-day minimum struck, four-unrelated-occupant limit upheld |
| Le v. North Shore | June 9, 2026 | "Residential use" and no leasing "for hotel or transient purposes" | Board-adopted 30-day rule upheld |
The vote counts in these cases mattered less than the wording. In Vista Del Corazon, the court said following the supermajority amendment procedure could not stand in for the notice Kalway requires. It also said § 33-1806.01 does not by itself give an HOA the power to impose rental-duration limits. Two communities could pass the same amendment by the same margin and get opposite results, because one declaration was drafted with a transient-use clause and the other was not.
The Detail the 2026 Decision Added
Le v. North Shore involved a Tempe condominium. The owners bought two units in 2020 and 2021 as investment properties they planned to use as short-term rentals. In February 2022 the board adopted a rule setting a 30-day minimum lease term. The trial court ruled for the owners. The Court of Appeals reversed.
The decision does three things a Scottsdale buyer can use.
First, it holds that a board rule, not just a membership vote, has to pass the Kalway test. The court reasoned that a board is made up of a minority of owners, so its rules cannot get more leeway than an amendment passed by a majority.
Second, it gives an undefined word a working definition. The declaration said "transient" without defining it. The court looked to state tax law, which treats a transient as someone paying for lodging for fewer than thirty consecutive days, and to Tempe's zoning code. It concluded that a 30-day line was a foreseeable way to define the term.
Third, it shows why a past amendment does not settle the question. North Shore had removed a one-year minimum lease from its declaration in 2008, and the owners relied on that history. The court gave it little weight because the "residential use" and "transient" language was never removed.
The decision is marked not precedential and can be cited only as Arizona's court rules allow. Even so, it follows the same reasoning as Preston, so it is a useful guide to how these disputes are being decided. Each declaration is still its own document, and a real estate attorney is the right person to give a formal opinion on a specific one.
Reading the Packet Inside the Window
With five days on the clock, these are the items worth pulling first:
- The use clauses in the recorded declaration. Look for "residential use," "hotel," "transient," and any minimum lease term. Under the case law above, these phrases decide whether a short-stay limit could be added later.
- The amendment history. Compare later amendments with the original wording. Gross and Vista Del Corazon both turned on what the original declaration said.
- The HOA disclosure materials. Under AAR's September 2026 HOA/Condo Addendum, buyers receive the current declaration, bylaws and rules, the minutes of the three most recent open board meetings, cited unresolved violations and pending lawsuits. Buyers then have five days after receipt to disapprove. Board minutes are where a proposed rental rule shows up before it is adopted.
- The city's license map. Scottsdale's Short-Term Rental Resource Center at str.scottsdaleaz.gov shows a license marker for each property. P means pass, F means fail, I means application pending and E means expired with no renewal pending. The city checks registration, liability insurance and neighbor notification, so the map shows license compliance and does not show whether the HOA permits the use. The city's COS Maps also has separate layers for short-term rentals and pending ones.
- The seller's rental answers. Read the disclosure statement's rental-duration and current-lease responses alongside the documents above, not on their own.
Investor buyers should also know that the statute limits what an HOA can charge for rentals. Tenant disclosures can cost at most $25 per new tenancy, with no charge for renewals, and late or incomplete information can add at most $15. An HOA generally cannot impose rental-specific fees that differ from what owner-occupants pay, apart from the stated exceptions.
What Could Still Change at the Capitol
The state framework has stayed in place through repeated attempts to change it. HB 2429, sponsored by Rep. Selina Bliss, passed the House in 2026 and was then held in the Senate. In August 2026, the League of Arizona Cities and Towns adopted eight policy priorities for the next session, and half of them concern short-term rentals. They include a ballot referral to let local voters weigh in, higher license fees and lien authority for delinquent fines. No bills will be introduced until after the November election, and each proposal needs a legislative sponsor.
None of these proposals, as reported, would change the Kalway covenant test. Even if the city gains new authority, the question of whether a specific street can limit short stays still comes back to its recorded documents.
Questions Buyers Raise
Does a licensed STR on the street mean the HOA allows it?
No. The city license confirms registration, insurance and neighbor notification. Whether the use fits the covenants is a separate question that the declaration answers.
Who handles a problem at a nearby rental?
The city says to contact the rental's listed emergency contact first, then use ScottsdaleEZ or call the Office of Citizen Service at 480-312-RENT (7368). Its examples include unlicensed advertising, trash, noise between 10 p.m. and 9 a.m., partial-home rentals and commercial events.
If our HOA passes a rental limit next year, will it hold?
It depends on whether the original declaration foreshadowed the limit. The cases above show that the declaration's wording decides that more than the size of the vote does.
If you are weighing a Scottsdale home and want help reading its declaration and HOA packet before the review period runs out, Jaime Fernandez can go through those documents with you and point out the rental provisions worth asking an attorney about.
