Indiana HOA Short-Term Rentals

Quick-Reference: Short-Term Rentals in Indiana Associations

Last verified: July 17, 2026

Section 1: Overview - Can an HOA restrict short-term rentals in Indiana?

An Indiana condominium or homeowners association can restrict or prohibit short-term rentals through its recorded declaration, backstopped by the Indiana Condominium Act or the Indiana Homeowners Associations Act, and the state short-term rental statute restrains local governments rather than associations. Indiana runs as a two-statute, non-UCIOA state: condominiums fall under the Indiana Condominium Act, Ind. Code § 32-25,¹ and homeowners associations, planned communities, fall under the less comprehensive Indiana Homeowners Associations Act, Ind. Code § 32-25.5.² The state short-term rental statute, Ind. Code § 36-1-24, generally bars a local unit from prohibiting an owner from using residential property as a short-term rental and limits the ways a unit may regulate short-term rentals,⁴ but that preemption restrains local governments only, and Ind. Code § 36-1-24-19 expressly provides that the chapter doesn't affect or render unenforceable property or use restrictions in the properly enacted rules of a homeowners or condominium association.⁶ The recorded declaration, not the statute, is the source of any rental restriction; the two statutes supply governance and enforcement procedure around it. A local short-term rental permit and the county innkeeper's tax stand as owner-facing layers distinct from association authority, and an owner can satisfy both while still violating the governing documents.⁹ The sections that follow set out the framework, the mechanics of adopting and enforcing a restriction, and recent legislative activity.

Section 2: The legal framework for HOA short-term rental restrictions

2A. The two statutes and the source of rental authority

Indiana regulates the two community forms under separate statutes that aren't interchangeable. Condominiums fall under the Indiana Condominium Act, Ind. Code § 32-25, a traditional condominium statute organized into chapters covering the declaration, Chapter 7, administration and bylaws, Chapter 8, grievance resolution, Chapter 8.5, and actions and proceedings, Chapter 9.¹ Homeowners associations fall under the Indiana Homeowners Associations Act, Ind. Code § 32-25.5, enacted in 2009.² The Homeowners Associations Act runs materially less comprehensive: it addresses governance items such as budgets, records inspection, meetings, amendments, and grievance resolution, but it doesn't occupy the field the way a full common-interest-ownership code would, and by its terms it applies in full only to associations formed after June 30, 2009 or to older associations that vote to be bound.²⁰ Most Indiana associations of both types organize as nonprofit corporations and therefore also answer to the Indiana Nonprofit Corporation Act of 1991, Ind. Code § 23-17, for corporate matters such as board governance and member rights.²¹

Neither statute grants or withholds a general power to restrict rentals. For both community types, the recorded declaration is the primary source of any rental restriction, and the statutes supply the procedure for adopting, amending, and enforcing it. That distinction matters in practice because authority over long-term leasing and authority over short-term or transient rentals run analytically separate. A declaration may permit leasing generally while capping the number of leased units, imposing a minimum lease term, or prohibiting transient occupancy specifically. Because the text of each declaration controls, a board should read its own instrument closely rather than assume a statutory default, and shouldn't import a provision from the Condominium Act into a planned community or from the Homeowners Associations Act into a condominium.

2B. Restricting rentals, amendments, and grandfathering

An association ordinarily adds or strengthens a rental restriction by amending the declaration. For condominiums, an amendment to the bylaws is valid only if it's set forth in a recorded amendment to the declaration, § 32-25-8-1,⁸ and the statute caps the vote the governing documents may require: the percentage of votes required to amend the bylaws may not exceed 75%, § 32-25-8-2(11), and the declaration may not require the consent of more than 75% of co-owners to amend the declaration, § 32-25-7-7.¹⁰ For homeowners associations, the governing documents must permit amendment and, under § 32-25.5-3-9, couldn't require the consent of more than 75% of owners;¹¹ the 2026 General Assembly lowered that ceiling so that governing documents may not require the consent of more than two-thirds of owners, effective July 1, 2026.¹² These are ceilings on what the documents may demand, not a single uniform threshold, so the operative figure for any given community is the percentage stated in its own declaration, subject to the statutory cap.

Indiana doesn't otherwise limit an association's authority to restrict rentals by statute. Unlike California Civil Code § 4741 or Arizona Revised Statutes § 33-1806.01, neither the Condominium Act nor the Homeowners Associations Act caps the number of rentals an association may restrict or protects a minimum owner right to rent, and § 36-1-24-19 confirms that the state short-term rental statute leaves association authority intact.⁶

Whether a validly adopted restriction binds an owner who purchased before the amendment deserves a conservative framing. Indiana provides no Florida-style or California-style statutory grandfathering shield. Enforceability turns on the declaration's amendment provision, the applicable statute, and Indiana common law, under which recorded covenants get treated as contracts among owners and get enforced where the owner had actual or constructive notice of the restriction.¹³ An owner who takes title subject to a declaration that reserves the power to amend generally takes subject to later amendments adopted through that process, but a board contemplating a retroactive rental restriction should obtain counsel on notice, reasonableness, and any reliance defenses rather than assume automatic enforceability.

2C. State preemption, tax, and the local layer

Ind. Code § 36-1-24, added in 2018, preempts local prohibitions on short-term rentals. A short-term rental of owner-occupied property is a permitted residential use that a zoning ordinance may not disallow in a district that permits residential use, § 36-1-24-8,⁴ and a unit may not interpret its zoning to prohibit or unreasonably restrict short-term rentals of property that isn't owner-occupied, though it may require a special exception, special use, or zoning variance for such property, § 36-1-24-9.²² A unit may enact or enforce a law that regulates, prohibits, or limits short-term rentals only for enumerated primary purposes, including public health and safety, residential-use and zoning concerns such as noise and nuisance, prohibiting specified illegal uses, conservancy-district limits, and providing an emergency contact, § 36-1-24-10.⁵ Critically, § 36-1-24-19 provides that the chapter doesn't affect, prohibit, preempt, or render unenforceable any property or use restrictions in the properly enacted rules or regulations of a homeowners association, condominium association, lake owners association, or similar association.⁶ The Indiana statute therefore contains an express savings clause: it affirms association authority rather than merely leaving it untouched, and it doesn't limit association authority.

Short-term lodging also carries an owner-facing tax layer. Indiana applies its 7% state gross retail, sales, tax to rooms and accommodations rented for fewer than 30 days, and counties may impose a county innkeeper's tax, in addition to the state tax, on the same short-term lodging; the Indiana Department of Revenue states that "the County Innkeeper's tax (CIT) is a county tax on the rental of rooms and accommodations for periods of less than 30 days. CIT is applied in addition to state sales tax."⁹ Beginning July 1, 2019, the innkeeper's tax reaches "houses, apartments, condominiums, or other personal residences in which rooms, lodgings, or accommodations are rented or furnished for consideration" for fewer than 30 days, subject to exemptions such as the casual-renter exemption for a primary residence.²³ The innkeeper's tax rate gets set by county ordinance and varies by county; the uniform statute for one county group, for example, sets a 4% rate that "may be increased to not more than six percent (6%)," Ind. Code § 6-9-3-4,²⁴ and marketplace facilitators such as Airbnb and Vrbo generally collect and remit both taxes.⁹ These taxes, and any local permit, are the owner's obligation to the government. They neither grant nor remove association authority, which is why an owner who holds a valid local permit and remits the tax may still be violating the declaration, and conversely why an owner who complies with the declaration may still owe a permit and tax to the local unit and the state.

Section 3: Operational mechanics and enforcement

A. Adopting a valid restriction (the tools)

The most common and defensible mechanism is a minimum-lease-term restriction, since it targets transient occupancy without prohibiting leasing outright. Indiana sets no statewide statutory minimum lease term for associations, so the threshold that defines a prohibited "short-term" rental is whatever the declaration states; associations frequently borrow the fewer-than-30-days line used by § 36-1-24 and the county innkeeper's tax, but that figure is a drafting choice, not a statutory default.⁹ Rental caps, which limit the number or percentage of units that may be leased at one time, answer likewise to the declaration for both community types; neither the Condominium Act nor the Homeowners Associations Act supplies a cap or a formula, so the declaration and bylaws control. An association may also impose internal administrative requirements, such as registering rentals with the board, filing a copy of the lease, or providing tenant and emergency-contact information, where the governing documents authorize the board to adopt such rules.⁸ Because these are association rules rather than governmental requirements, they run separate from, and additional to, any local permit under § 36-1-24.

B. Enforcement

Before a dispute reaches court, both statutes require the parties to work through internal grievance procedures. The Homeowners Associations Act requires the governing documents to include grievance-resolution procedures and provides that a claimant may not begin legal proceedings until the procedures are followed, including a written notice of claim and a defined window for the respondent to request a meeting, § 32-25.5-5.¹⁶ The Condominium Act contains a parallel grievance-resolution chapter that a claimant must satisfy before legal proceedings, § 32-25-8.5.¹⁵ Notice and an opportunity to be heard before a fine answer principally to the governing documents; the 2026 amendments add a statewide framework allowing a homeowners association to fine for a covenant violation after it adopts a schedule of fines and gives the member notice, effective July 1, 2026.¹² Available remedies include fines and injunctive relief as authorized by the governing documents, and money judgments; a condominium board may bring an action on behalf of two or more co-owners, § 32-25-9-2,¹⁷ and unpaid amounts may be pursued as assessments and enforced through a lien, which a homeowners association enforces by filing a complaint in the circuit or superior court where the property sits, § 32-28-14.¹⁸ Association enforcement runs on a track separate from local-government enforcement: a unit enforcing its own short-term rental ordinance under § 36-1-24 doesn't act for the association, and the association's covenant enforcement doesn't depend on the local ordinance.

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

No published Indiana Court of Appeals or Indiana Supreme Court opinion decided within the past 36 months squarely addresses the enforceability of a short-term rental or residential-use covenant, a declaration amendment adding a rental restriction, or association authority to restrict short-term rentals. Several association decisions in the window concern assessments, liens, and architectural review rather than rentals. The leading Indiana precedents on rental and residential-use covenants predate the window: the Indiana Supreme Court upheld a no-lease covenant against a fair-housing challenge in Villas West II of Willowridge Homeowners Association v. McGlothin, 885 N.E.2d 1274 (Ind. 2008),²⁶ and the Court of Appeals treated short-term cabin rentals as a permissible "residential use" under the covenants at issue in Applegate v. Colucci, 908 N.E.2d 1214 (Ind. Ct. App. 2008),²⁷ a reminder that covenant text controls outcomes.

C. Active legislative or local debates

The 2026 session produced a second enacted measure, House Bill 1152, "Homeowners association matters," signed as Public Law 53, effective July 1, 2026, which addresses budgets, service fees, amateur-radio antennas, and child-care homes but doesn't address short-term rentals.²⁸ At the local level, Indianapolis began requiring a short-term rental permit on January 1, 2025 under Code of Ordinances Chapter 852, with a one-time $150 fee per unit and annual renewal — more than 1,100 properties had registered as of early 2025²⁹ — and the town of Speedway instituted a short-term rental ordinance on October 1, 2023, with 137 properties permitted as of January 2025, both aimed at owner registration rather than association authority.³⁰

Section 5: National positioning and related coverage

Indiana sits with the group of states that preempt local short-term rental bans while leaving association authority to the declaration. Through Ind. Code § 36-1-24 it limits how local governments may prohibit or regulate short-term rentals, as Florida, Arizona, and Idaho do, but it stops there: it doesn't adopt the California or Arizona model of capping or protecting an owner's right to rent against the association. Instead, § 36-1-24-19 contains an express savings clause preserving the enforceability of homeowners-association and condominium-association restrictions, so the statute affirms rather than limits association authority.⁶ The practical point for boards and managers: the preemption and any local permit restrain local governments and owners, not associations. For a multi-state operator entering Indiana, the distinctive features run three deep — the two-statute structure, a homeowners-association act that's less comprehensive than a full common-interest code, and rental authority that's driven by the recorded declaration rather than by statute.

HOA Weekly's Indiana Short-Term Rentals coverage updates quarterly as the General Assembly, the Indiana Court of Appeals and Supreme Court, and local governments act. Federal frameworks — including the FHA, ADA, FDCPA, SCRA, and OTARD — also apply to Indiana associations regardless of the state framework.

Footnotes

1. Indiana Code Title 32, Article 25 (Condominiums), Indiana General Assembly ↩
2. Indiana Code Title 32, Article 25.5 (Homeowners Associations), Indiana General Assembly ↩
3. Indiana Code Title 36, Article 1, Chapter 24 (Short Term Rentals), Indiana General Assembly ↩
4. Ind. Code § 36-1-24-8 (Owner Occupied Short Term Rental Property Is a Permitted Residential Use): "A short term rental of owner occupied short term rental property is a permitted residential use ... and may not be disallowed by any zoning ordinance ... in a zoning district or classification of a unit that permits residential use." ↩
5. Ind. Code § 36-1-24-10 (Enforcement of Laws That Regulate, Prohibit, or Limit Short Term Rentals): a unit may regulate, prohibit, or limit short term rentals only for the enumerated primary purposes (public health and safety; residential use and zoning; specified illegal uses; conservancy districts; emergency contact). ↩
6. Ind. Code § 36-1-24-19 (Scope of this chapter): "This chapter does not affect, prohibit, preempt, or render unenforceable any property or use restrictions contained in properly enacted rules or regulations of a: (1) homeowners association; (2) condominium association; (3) lake owners association; or (4) similar property owners association or cooperative." ↩
7. Ind. Code § 32-25-7-1 (Recording declaration; contents), including "any covenants and restrictions in regard to the use of ... the condominium units." ↩
8. Ind. Code § 32-25-8-2 (Bylaws; contents), including subdivision (10) on use restrictions and subdivision (11) on the percentage of votes required to amend the bylaws. ↩
9. Indiana Department of Revenue, County Innkeeper's Tax: "The County Innkeeper's tax (CIT) is a county tax on the rental of rooms and accommodations for periods of less than 30 days. CIT is applied in addition to state sales tax." ↩
10. Ind. Code § 32-25-7-7 (Amending declaration; consents required): "The declaration may not require that the consent of more than seventy-five percent (75%) of the co-owners is required for consent under this subdivision"; and Ind. Code § 32-25-8-2(11): the percentage of votes required to amend the bylaws "may not exceed seventy-five percent (75%)." ↩
11. Ind. Code § 32-25.5-3-9 (Amending governing documents; consents required): "The governing documents may not require that the consent of more than seventy-five percent (75%) of the owners is required for consent under this subdivision" (version in effect before July 1, 2026). ↩
12. Indiana House Enrolled Act 1115 (2026), "Homeowners association governance," signed by the Governor; effective July 1, 2026; lowers the amendment-consent ceiling for HOA governing documents to not more than two-thirds of owners and adds a statewide fine-authority framework. ↩
13. Ind. Code § 32-25-7-7 (condominium amendment procedure) and Ind. Code § 32-25.5-3-9 (HOA amendment procedure); Indiana common law treats recorded covenants as contracts enforceable where the owner had actual or constructive notice. ↩
14. Ind. Code § 36-1-24-13 (Expiration; Authorization to Charge a Permit Fee): permit fee capped at $150. ↩
15. Ind. Code § 32-25-8.5 (Grievance Resolution), including § 32-25-8.5-10 (claimant may not begin legal proceedings until the chapter's procedures are followed). ↩
16. Ind. Code § 32-25.5-5 (Grievance Resolution): § 32-25.5-5-8 (governing documents must include grievance procedures), § 32-25.5-5-9 (claimant may not initiate legal proceedings until procedures are followed), § 32-25.5-5-10 (notice of claim), § 32-25.5-5-11 (10-business-day window to request a meeting). ↩
17. Ind. Code § 32-25-9-2 (Actions and proceedings): the board or manager may bring an action on behalf of two or more condominium unit owners. ↩
18. Ind. Code § 32-28-14 (Homeowners association liens): "A homeowners association may enforce a homeowners association lien by filing a complaint in the circuit or superior court of the county where the real estate that is the subject of the lien is located." ↩
19. Indiana Courts: trial jurisdiction lies in the Circuit and Superior Courts; appeals proceed to the Indiana Court of Appeals, with discretionary transfer to the Indiana Supreme Court. ↩
20. Ind. Code § 32-25.5-1 (Applicability): the Act applies in full to homeowners associations established after June 30, 2009 and to earlier associations whose members vote to be bound. ↩
21. Indiana Code Title 23, Article 17 (Nonprofit Corporation Act of 1991), Indiana General Assembly. ↩
22. Ind. Code § 36-1-24-9 (Short Term Rental Property That Is Not an Owner Occupied Short Term Rental Property; Special Exception; Zoning Variance): a unit may require a special exception, special use, or zoning variance but "may not interpret and enforce the unit's zoning regulations ... in a manner that is intended or has the effect of prohibiting or unreasonably restricting short term rentals." ↩
23. Indiana Department of Revenue, General Tax Information Bulletin #204 (County Innkeeper's Taxes): "Beginning July 1, 2019, houses, apartments, condominiums, or other personal residences in which rooms, lodgings, or accommodations are rented or furnished for consideration" for less than 30 days are subject to the innkeeper's tax. ↩
24. Ind. Code § 6-9-3-4 (illustrative uniform county innkeeper's tax provision): "The tax shall be at the rate of four percent (4%) on the gross retail income derived from lodging income only ... The tax rate may be increased to not more than six percent (6%)." ↩
25. Indiana Senate Bill 411 (2025), "Short term rental properties"; last recorded action January 13, 2025, first reading and referral to the Committee on Local Government; no further action. ↩
26. Villas West II of Willowridge Homeowners Ass'n v. McGlothin, 885 N.E.2d 1274 (Ind. 2008) (citation for verification; confirm published opinion via courts.in.gov). ↩
27. Applegate v. Colucci, 908 N.E.2d 1214 (Ind. Ct. App. 2008) (citation for verification; confirm published opinion via courts.in.gov). ↩
28. Indiana House Bill 1152 (2026), "Homeowners association matters," signed as Public Law 53, effective July 1, 2026; addresses budgets, service fees, amateur-radio antennas, and child-care homes. ↩
29. Indianapolis-Marion County Code of Ordinances, Chapter 852 (Indianapolis Short-Term Rental Permit Program); $150 permit fee per Ind. Code § 36-1-24-13; program effective January 1, 2025. ↩
30. Town of Speedway, Indiana short-term rental ordinance, effective October 1, 2023 (137 permitted properties reported as of January 2025). ↩