Key Findings

• Governance splits by age. Condominiums created after January 1, 1991 fall under the Alabama Uniform Condominium Act of 1991, § 35-8A; those created earlier fall under the predecessor Alabama Condominium Ownership Act, § 35-8, with only enumerated 1991-Act sections reaching back.¹ Non-condominium planned communities have no comprehensive statute — their rental authority comes straight from the CC&Rs.
• Alabama has no state STR statute and no preemption. The state regulates short-term rentals only through taxation and leaves operational regulation to localities; no statewide framework limits association authority.
• A bare "residential use" covenant doesn't reach short-term rentals. In Slaby v. Mountain River Estates Residential Ass'n, Inc., the Court of Civil Appeals held that short-term rental did not violate a covenant limiting use to "single family residential purposes only" and barring "commercial use."⁷
• Amendment thresholds differ by community type. Condominium declarations amend at two-thirds of votes, with a unanimous-consent overlay for use changes, under § 35-8A-217; planned-community CC&Rs amend at whatever their own clause requires.⁴

Details

The legal framework for HOA short-term rental restrictions

Source and scope of authority by community type. For condominiums, the declaration is where any rental restriction originates. The Alabama Uniform Condominium Act of 1991 applies to every condominium created in the state after January 1, 1991 and governs the declaration's contents (§ 35-8A-205), its amendment (§ 35-8A-217), and the association's powers (§ 35-8A-302).¹ Condominiums created before January 1, 1991 remain under the predecessor Alabama Condominium Ownership Act (§ 35-8-1 et seq.), except for the specific 1991-Act sections that reach back under § 35-8A-102.¹⁴ The 1991 Act contains no provision addressing short-term or transient rentals specifically; any such restriction must find support in the declaration, which the Act enforces and supplies the machinery to amend.

For planned communities — non-condominium HOAs — the CC&Rs are the sole source of rental authority. Alabama has no comprehensive planned-community statute. Title 10A supplies corporate-formality scaffolding, and the Alabama Homeowners' Association Act, § 35-20, applicable to HOAs created on or after January 1, 2016 plus earlier HOAs that opt in, adds corporate-governance requirements such as nonprofit organization, Secretary of State filing, and board powers — but it neither imposes rental-specific obligations nor supplies a rental-use rule.²

Alabama common law governs the covenants themselves, construing restrictive covenants in favor of the free use of property while enforcing validly adopted restrictions.⁷ A recurring distinction runs through the case law: a covenant that limits property to "residential purposes" and bars "commercial use" does not, without more, prohibit short-term rentals, because renters who eat, sleep, and reside in the dwelling are still using it for residential purposes.

State law, local ordinances, and the preemption question. Alabama has no statewide statute regulating short-term rentals operationally, and none preempts association authority. At the state level, the practical touchpoint is tax: Alabama imposes a transient occupancy, or lodging, tax — administered by the Alabama Department of Revenue under § 40-26-1 — on accommodations rented to transients for periods of less than 180 days of continuous occupation, at 5 percent in the sixteen Mountain Lakes counties (Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, and Winston) and 4 percent everywhere else, with local lodging taxes stacked on top.⁶

Local governments handle operational regulation. Gulf Shores requires a business license and a rental license, with safety inspections, and defines a "vacation rental" as "any lease, sublease, rental or any licensing of use of a dwelling unit by an owner or lessee for fewer than 180 consecutive days."⁸ Orange Beach requires a business license and a vacation rental license, defines a "vacation rental" as a single-family or two-family dwelling offered for periods of fourteen consecutive days or less, and applies its vacation-rental article only in the RS-1, RS-2, RS-3, and MHS zoning districts, excluding the beach overlay district.⁹

Here's the point associations need to grasp: these ordinances regulate the owner-to-government relationship only. They neither grant nor remove an association's private authority. An owner can hold a valid city STR permit and still violate the declaration or CC&Rs, and an owner can satisfy the association's rules while still lacking the city permit. The two layers run independently.

Amending the governing documents to restrict rentals; grandfathering. For condominiums, an association typically adds a rental restriction by amending the declaration under § 35-8A-217. The general threshold in § 35-8A-217(a) calls for the affirmative vote or agreement of unit owners holding at least two-thirds of the votes in the association, or any larger majority the declaration specifies.

A separate limit decides the grandfathering question: § 35-8A-217(d) provides that, except as other provisions of the chapter expressly permit or require, no amendment may change "the uses to which any unit is restricted" without the unanimous consent of the unit owners.⁴ Whether adding a rental restriction "changes the uses to which any unit is restricted" is the interpretive question, and the unanimous-consent language gives non-consenting existing owners strong protection. A rental restriction adopted by a two-thirds vote alone is legally vulnerable against owners who didn't consent, and enforcement against them is the point at which that vulnerability is tested.

For planned communities, no statutory amendment threshold applies; the vote required to amend the CC&Rs and add a rental restriction is whatever the declaration's own amendment clause requires. Alabama common law construes restrictive covenants in favor of free use, and the leading STR-specific decision, Slaby v. Mountain River Estates Residential Ass'n, Inc., 100 So. 3d 569 (Ala. Civ. App. 2012), held that a covenant limiting use to "single family residential purposes only" and barring "commercial use" did not prohibit short-term rentals; the court concluded that "the Slabys' short-term rental of the property does not violate the terms of the restrictive covenant limiting the use of the property to single-family residential purposes."⁷

The practical takeaway: a bare "residential use" covenant likely won't reach short-term rentals in Alabama. Associations need an express and clearly drafted rental restriction, and whether a newly adopted restriction binds pre-existing owners depends on the governing documents and, for condominiums, on § 35-8A-217(d). Where the law stays silent, resolve conservatively.

Operational mechanics and enforcement

Adopting a valid restriction (the tools). The most common and defensible mechanism is a minimum-lease-term restriction, which prohibits rentals shorter than a stated number of days. Since Slaby shows that a generic "residential use" covenant won't reach short-term rentals, an express minimum-lease-term or transient-rental prohibition stands as the reliable tool.⁷

For condominiums, such a restriction lives in the declaration and gets added or strengthened by amendment under § 35-8A-217; for planned communities, it lives in the CC&Rs and amends per the declaration's clause. Neither community type has a statute addressing rental caps that limit the percentage of units that may be rented; for condominiums the declaration governs, amended under § 35-8A-217, and for planned communities the CC&Rs govern. Associations may impose registration, owner-information, and lease-filing requirements internally by rule or through the declaration, subject to the association's rulemaking authority — § 35-8A-302 for condominiums,⁵ the governing documents and § 35-20 for planned communities.

Enforcement. Before levying a fine, a condominium association must give the owner notice and an opportunity to be heard, under § 35-8A-302(a)(11).⁵

For planned communities created on or after January 1, 2016, § 35-20-11 requires that the member get an opportunity to be heard and to be represented by counsel before the board assesses penalties;¹⁰ pre-2016 HOAs that haven't opted in take their procedure from the CC&Rs.

Available remedies include reasonable fines, injunctive relief, and lien enforcement: for condominiums, fines charged under § 35-8A-302(a)(11) are enforceable as assessments and secured by the association's lien, under § 35-8A-316;¹¹ for post-2016 HOAs, penalties count as assessments for purposes of the lien under § 35-20-12.¹² Association enforcement runs on a track separate from local-government enforcement. On the Gulf Coast especially, a city can cite or fine an owner for operating without a permit or for occupancy and noise violations while the association separately enforces the declaration or CC&Rs — the two don't substitute for each other.

Recent legislative and judicial activity

Recent bills. No Alabama bill in the 2024, 2025, or 2026 Regular Sessions created a statewide short-term rental framework, preempted local STR ordinances, or limited association authority to restrict rentals. One enacted measure touches the subject indirectly: the Tourism Tax Protection Act.

Recent appellate rulings. No Alabama appellate decision in the past 36 months squarely addresses the enforceability of a short-term rental restriction; the leading STR-specific authority remains Slaby v. Mountain River Estates Residential Ass'n, Inc., 100 So. 3d 569 (Ala. Civ. App. 2012), discussed above. The most relevant recent covenant-enforcement decision, Dendy v. Ryan, comes from the state's highest court.

Active debates. Gulf Coast localities keep adjusting STR rules at the municipal level — Gulf Shores, for instance, has revisited vacation-rental licensing and signage — and these local actions, not state legislation, remain the active front for STR regulation touching owners in associations. One 2026 act widens that local toolkit for Birmingham: Act 2026-511 (HB 315), effective October 1, 2026, authorizes a Class 1 municipality to enact vacant-property registration ordinances (§§ 11-67C-1 to -7), and its definition of “residential building” expressly includes “[a] house, condominium, townhouse, or any other building where the whole building or significant parts of the building are designed or used as residential.”¹⁷

National positioning and related coverage

States take three broad approaches to short-term rentals and HOAs. Some preempt local-government STR bans while leaving association authority intact — Arizona, Florida, and Texas are examples. Others regulate STRs primarily at the local level with no statewide HOA override; Alabama sits here, with active Gulf Coast local regulation and no statewide framework. A third group has little STR-specific law at any level.

The distinction that matters for operators: even in preemption states, an association's authority comes from the declaration or CC&Rs and doesn't disappear under state-versus-local preemption, which restrains cities and counties, not private associations. For a multi-state operator entering Alabama, the practical implication is a split condominium/planned-community model with heavy Gulf Coast condominium concentration — condominium declarations, backstopped by § 35-8A, drive most beach-market rental rules, while inland planned communities depend entirely on their CC&Rs.

Federal frameworks — FHA, ADA, FDCPA, SCRA, and OTARD — also apply to Alabama associations regardless of the state framework.

Recommendations

1. The governing documents, not a statute, are the starting point. Whether an STR restriction exists, and how it can be added, depends on the recorded declaration or CC&Rs and their own amendment clause. Under Slaby, a generic "residential use" or "no commercial use" covenant did not bar short-term rentals.
2. For condominiums, § 35-8A-217(d) matters as much as the two-thirds vote. An amendment that changes "the uses to which any unit is restricted" requires unanimous consent, and § 35-8A-217(b) allows a challenge to an amendment for one year after it is recorded; whether a rental restriction is such a change is unresolved in Alabama.
3. For planned communities, the CC&R amendment clause sets the vote. The condominium two-thirds figure does not apply; the declaration's stated threshold governs, and Slaby shows that "residential use" language alone did not reach short-term rentals.
4. The permit layer and the covenant layer are separate. A Gulf Shores rental license or Orange Beach vacation rental license doesn't authorize a use the declaration or CC&Rs prohibit, and association approval doesn't substitute for a city license or lodging-tax registration.
5. Fines follow notice and a hearing. Notice and an opportunity to be heard come before a fine — § 35-8A-302(a)(11) for condominiums, § 35-20-11 for post-2016 HOAs — and Dendy held that willful violation bars the equitable relative-hardship defense.

Benchmarks that would change these recommendations: enactment of an Alabama statute creating a statewide STR framework or preempting local ordinances; any statute limiting association rental authority; or a new Court of Civil Appeals or Supreme Court decision interpreting § 35-8A-217(d) as applied to rental restrictions, or extending or limiting Slaby. Absent those, the framework above holds.

Caveats

• Whether § 35-8A-217(d)'s unanimous-consent requirement applies to a rental restriction remains an interpretive question no Alabama appellate decision has resolved on these facts; the analysis here runs conservative, and the answer for a specific declaration depends on its wording.
• Slaby interpreted a specific covenant and expressly limited its holding to the circumstances presented; a differently worded covenant — one expressly prohibiting rentals under a stated term, say, or requiring owner occupancy — can reach a different result.
• Local ordinances and lodging-tax rates change frequently and vary by jurisdiction; the Gulf Shores and Orange Beach provisions cited here are subject to amendment in each city's municipal code.
• This page addresses the state-law and local framework for association authority over rentals; it doesn't analyze federal overlays — FHA, ADA, FDCPA, SCRA, OTARD — which apply independently.