Following all applicable laws is a critically important part of operating a short-term rental responsibly – or at all. Cities are increasingly imposing hefty penalties for failure to comply with local short-term rental ordinances, ranging from expensive fines to revoking short-term rental permits entirely.
However, as more municipalities adopt short-term rental ordinances, the rules are not always easy to find and understand, and compliance processes can be complicated and messy, even to city staff. Nonetheless, it is your responsibility to ensure that your short-term rental activity is legal and that you have taken the steps to comply with all applicable rules.
In an ever-changing legal landscape, how can you be 100% confident your short-term rental complies with regulations?
Google your local short-term rental rules
Your city council typically makes the laws governing short-term rentals. The easiest way to find them is to do a simple Google search for “short-term rental rules in [your city and state].”
You should also find the exact short-term rental ordinance text on your city’s official website. Most city websites offer a page specifically on short-term rental regulations that are summarized for your convenience.
Talk to your city about your STR ordinance
However, it’s best to confirm current regulations with the city officials who draft the laws to check for any recent changes and to make sure that you understand the requirements.
The city website typically includes contact information for city employees who oversee compliance and enforcement of your area’s short-term rental ordinance.
As much as you can, document your interactions with city officials through email. This will ensure that your inquiries are not lost and serve as a helpful reference if you ever have to refer back to them.
Corroborate information from your local host network
When it comes to verifying your local laws, be cautious about relying on information shared through word of mouth or loosely associated short-term rental groups. These groups can provide great tips but may not always translate local laws accurately or completely. If your area has a local alliance or association, check directly with their board or leadership team.
Interested in starting an alliance of your own? Access our DIY Guide >
Check your STR’s zoning
The first thing you need to check is whether the local ordinance allows short-term rentals in your zoning district. Some cities restrict short-term rentals to certain zoning districts. Others allow them in all parts of the city. The city’s code enforcement or planning department will be able to confirm whether your home sits in a zone where short-term rentals are permitted.
Pro Tip: If you’re in a neighborhood with an HOA, check with your covenants, too, as HOA rules may be more strict than your city.
Get your STR license, permit, or registration
Many cities require either registration, a permit or license, and possibly both, to operate a short-term rental.
The application process for a license or permit may involve submitting a site plan and floor plan of the home, completing a safety certification or checklist, providing proof of short-term rental insurance, and paying a fee.
Count on tourism, lodging, or occupancy taxes
As a short-term rental operator, you will be required to pay one or more types of taxes, frequently an occupancy, lodging, or tourism tax.
In specific jurisdictions, booking platforms like Airbnb and Vrbo will often collect and pay these taxes on behalf of hosts. Check with each platform you advertise on for details on if and how they collect relevant taxes, and check with your local tax authorities to find out whether you may still need to file tax paperwork with your city and county. Even if the platforms collect on your behalf, some cities still require you to file tax forms even if the amount is $0.
If you’re responsible for remitting your own taxes, you could use a lodging tax compliance solution like Avalara’s MyLodgeTax to calculate, collect, and pay your taxes for you. Such services often include filing your tax return and guiding you through your licensing or permitting application.
Read more: QBID and other common questions about vacation rental taxes
Implement good neighbor practices and noise monitoring in your STR
Few cities currently require installing noise-monitoring devices as part of the criteria for operating a short-term rental. Many more, however, are creating good neighbor policies to prevent nuisance issues, including noise, regardless of whether noise is monitored by tech. Be proactive by implementing your own good neighbor policies and practices, which could include voluntarily adding a device to your short-term rental unit.
Stay informed of new STR rules
Many short-term rental licenses and permits require annual renewal, providing a perennial opportunity to learn of any updates in the law. Still, it’s important for you as an operator to stay informed about any changes in requirements.
Here are a couple of ways to stay in the loop about law changes:
- Join your local short-term rental alliance to stay informed about regulations and compliance. Don’t have one? Learn how you can start one.
- Set up a Google alert for “short-term rentals” and your “city name.”
- In some cities, you may be able to sign up to receive an email or notice when your planning commission or city council posts a new meeting agenda where law changes would be considered.
- Keep in touch with your local city council and employees of your code enforcement or planning department. Check in with them on a regular basis to learn of any updates you need to know about in your city.
Disclaimer: The article is intended for information purposes only. Readers should engage their local governments or professional legal advice to ascertain the regulations that apply to their particular situation.
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