The Most Common Vacation Rental Laws & Regulations
Vacation rentals are a great way for businesses to earn money. Whether looking to generate extra income on the side or finance the costs of owning a second home, the vacation rental industry is booming. Vacation rental industry platforms like Airbnb, VRBO, and AllTheRooms have millions of listings combined in a market worth over $100 billion.
The popularity of short-term rentals has changed the way people vacation, but not without ruffling some feathers. Neighboring residents report horror stories of short-term renters who play loud music and party while on vacation. Meanwhile, the competition of vacation homes has threatened the traditional hotel industry.
Business owners can often charge more money for vacationers than long-term tenants, and critics argue that short-term rentals take badly-needed apartments and homes off the market for local permanent residency.
Complaints from local residents and hotel property management prompted cities to start cracking down and pass laws that regulate short-term rentals. Make no mistake: violation of such laws can be costly. The Miami city council, for example, imposes fines starting at $20,000 for renting out illegal vacation homes.
Not every city takes such drastic measures to regulate short-term rentals. Vacation rental regulations vary by municipality, state, and country. To make things even more confusing, laws change constantly. Vacation rental managers should make themselves aware of some of the most common rental laws and regulations in order to avoid major fines and penalties.
Bans on Temporary or Non-traditional Rentals
A vacation rental property doesn’t necessarily have to mean a permanent home. Nontraditional short-term rentals like RVs and trailers have become increasingly popular. However, if you plan on renting out your RV or trailer in Los Angeles anytime soon, think again. As of December 2018, the LA city council adopted new rules which ban all temporary and “non-residential” structures such as tents, trailers, and RVs. So no more airstream rentals in Venice Beach.
Rental Period Limitations
The LA city council didn’t stop with banning non-residential structures in the recent short-term rental regulations. Property management should also note that LA now limits hosts to renting their residences for no more than 120 days per year. You can get around this limitation however, but you will need to apply for special permission and a business license of this kind will require paying $89 per year in extra fees.
Los Angeles isn’t the only city cracking down of course. The city of Miami also passed legislation that limits short-term rentals to 120 days. Because a large percentage of Miami Beach hosts rent out their property on a full-time basis, these limitations could have a major negative impact for rental owners who rely on their vacation homes to make ends meet.
As of January 2019, vacation rental regulations in Amsterdam also changed. Whereas before, rental owners could host for up to 60 nights, a new law has dropped that count in half to 30 days. The good news, though, is that this time period limitation only applies to renting out an entire apartment or home. Hosts who rent out a room where they also stay can workaround the night counts.
Number of Guests
Do you have a string of large vacation rooms perfect for families or group vacations? You may want to think again as some city councils are taking a stand and limiting the number of guests allowed in a vacation rental.
Starting in January 2019, Amsterdam will limit the number of guests hosted in each property to four adults at a time. That means Amsterdammers won’t have the ability to welcome large groups in town celebrating a bachelorette party or stag do. To keep track and regulate short-term guests, the government requires hosts to register guests with the city council.
Strict Bans on Short-Term Rentals
New York City takes an even stricter approach. New York Governor Andrew Cuomo signed a law that completely bans vacation rentals on home sharing sites. If you plan to host guests at your vacation rental in New York, you cannot rent out an entire apartment or home to visitors for under 30 days, even if you own the building. NYC law does allow short-term rentals only if you, the host, are present and staying together in a “common household”. In other words, a private room is the only type of short-term rental approved in New York.
Many European cities have also started to regulate short-term rentals. Paris, Barcelona, and Palma in Majorca, Spain have some of the strictest short term rental regulations. Paris represents one of the largest markets worldwide for vacation rental listings. City council authorities in Paris have rules in place that require hosts to register their rental property with the town hall. Those who earn over a certain amount each year may also need to pay income tax on the rental earnings.
How To Stay Within the Law for Short-Term Rentals
The moral of the story? When it comes to short-term rental regulations, the laws can change and vary greatly from place to place. In short, we recommend that vacation rental managers check a few things before hosting guests.
– Check the local vacation rental regulations in regards to your city, state, and country.
– Does the law require property management to register with the city council in order to accept short-term guests?
– Do rental owners have a limit on the number of guests per rental or the length of stay?
– Do rental owners need to obtain a business license or pay a fee to host guests?
– Do you, as the owner of the property, need to be living in the home and share a common area with guests in order to rent out a room for a short-term period?
– Are business owners permitted to advertise short term rentals on vacation listing or home sharing sites?
– What kind of penalties could you face for violating short term rental regulations?
To avoid stress and fees, make sure to stay informed about local regulations on vacation homes. You could save yourself thousands in fines, ensure a profitable business, and stay on good terms with your neighbors and community members.
About the author: Originally from Pennsylvania, Allison Dienstman lives as a digital nomad working as a freelance writer. Her travels over the past decade have taken her through China, Israel, India, and Europe. Allison also enjoys yoga, paddleboarding, cooking, and having a laugh with friends.