What is Needed to be Enforced in Short Term Rentals
When managing a property, there is obviously a great deal of legislation and many rules you must follow to ensure you are compliant with city, state, and localized laws, as well as the governing documents of the homeowners association. These rules can carry a hefty fine or another penalty if violated, so as managers, our goal is to ensure that they are followed fully and completely to prevent damage to property and other more serious issues.
With short term rental situations, even more laws and rules apply at the association and city, and state level. These laws are in place to protect all involved in the transaction, including the short term rental tenants and others who live near the property. These rules and laws vary by location so you should always check your specific requirements and expectations before exploring short term rental use restrictions. Let’s take a look at some of the most common and far-reaching short term rental enforcement laws that you might want to keep in mind when considering permitting or restricting short term rentals.
Common Laws for Short Term Rentals
While there are often variances in the general terminology and specifics of a given area’s laws concerning short term rental compliance and enforcement, there are some things you can expect to almost always be present regardless of location. While not always active, these are some of the most common laws that almost every location has in some form so it is best to keep these at the front of your planning and documentation practices. Even places currently without legislature dictating these rules are beginning to consider them or moving towards a plan to put them in place as a protective and preventative measure.
For example, one of the most reoccurring laws that experience frequent revision due to backlash from those looking to rent out their space for short periods of time concerns the disallowed nature of such practices altogether. Some areas have laws in place that prohibit the rental of spaces for a period of time less than thirty days. In these areas, like New York, you can expect there to be potential legal issues if your tenant or agency opts to rent out an apartment or similar apartment style space for less than thirty days without someone legally listed as a resident of the space physically staying within the home.
Since the short term rental industry is relatively new, you can expect a lot of revisions and changes to come as more and more places experience a renewed interest in the tourist aspects of their area with the rise of available short term rentals offering more affordable and comfortable accommodations than a traditional hotel or motel. This change can make navigating the short term rental market a bit tricky and makes it even more important that you make efforts to double-check any legislature surrounding your specific area.
Regulations for Short Term Rentals that Landlords Need to Know
All of this is to say that you need to understand your local regulations and fully abide by them. Some laws and ordinances carry fines that can be more than the entire monthly rent of a given space and some even charge per day the violation occurred, which can quickly add up to an expensive, hard to pay off bill with interest or other compounding features. Plus, having issues with the city can make it hard for you to rent your space in the future. If you are struggling to understand your local laws, reach out to officials or other sources to ensure you are fully in compliance.
When looking for what regulations you must follow, you must first figure out what your region defines as a short term rental. This could be as simple as a room or entire house that is listed for short term rental options or as complex as a full measurement of the square foot of the space and number of rooms. Depending on where you live, you may or may not have a space that qualifies as a viable short term rental option so be sure to check out your region’s definition before proceeding.
Aside from that, you should probably look into the duration that guests can stay in both the minimum and maximum variables. Some places do not place restrictions on the duration of a guest’s stay and treat short term rentals like hotels. Others are much stricter and require structured windows of time for each guest and a lot of documentation. One of the most common requirements is that the guest can only stay for up to thirty days before it is considered a full rental and a traditional lease agreement must be considered.
Certain areas may place restrictions on how frequently you can rent out your space and even require you to be present while the guests are in the home. Areas like New York and Los Angeles both require the primary registered resident of the home to live in the space in order to rent it for short term applications. Other areas have laws in a place completely prohibiting the usage of short term rental agreements or laws that restrict the number of days per year that a short term rental client can occupy the home. There are also restrictions placed on the number of rentals that can occur within a given radius, preventing over-saturation and sudden spikes in population. This is especially common in smaller areas that are popular with tourists or business ventures.
Permits, Paperwork, and More
There are often a series of documents that your region may require you to file in order to legally short term rent your space, especially if you have multiple homes or rooms you are looking to post on the market. While some areas are lax and do not have any specific permits or filing requirements, most have at least some sort of registration or fee so be sure to check in and make sure you are complying with any documentation you need to provide.
If you are making any money at all from renting your space, you likely have to pay taxes. At least in the United States, any form of income can be taxed and the Internal Revenue Service expects you to file your income and pay appropriate taxes each year or quarter depending on how you file. Failing to do this can be problematic and cause a hefty amount of fining and potential legal trouble so be sure to hire a tax preparation specialist if you are unsure of how to proceed with filing your short term rental income taxation documents. Also, you should note that in the United States, you do not have to file federal taxes if you rent your space for less than fourteen days per year, though your state or city may have different requirements.
Some areas require you to file for a general business license. This is a sort of permit that allows you to operate a business within the city or state and tracks you in case any complaints or legal litigation needs to be filed. It also acts as a flag for the IRS and federal government since it is on file that you have income coming in and, therefore, need to file taxes on the money you make from your short term rental venture.
Other areas require a more comprehensive short term rental license. This is a specific type of permit that allows you to operate a short term business venture within the region and gives you permission to rent out a given space or room. Some areas require you to file once for all of your properties and others require each property to be filed for individually so be sure to check your area’s specific ordinances to ensure your filing decision is correct. These types of permits often require a health and safety check on the home and zoning data to be collected to ensure that you are allowed to operate as a short term rental manager within the home you are trying to rent. They will also likely charge you fees for registration, some of which may be reoccurring yearly or quarterly depending on how your city or region operates.
The Importance of Documentation
When planning or maintaining your short term rental property, it is important to always make an effort to prepare a very detailed rental agreement. You should make any and all local and regional laws clear in the agreement and explain the penalties associated with noncompliance of said laws and ordinances. All of this will assist you in curating a very airtight and protective agreement that will ensure both you and your client are fully prepared and understand the legal aspects of residing in the short term rental location.
Our team here at Property Guard can provide you with a turn key monitoring solution for your short term rental properties. We can provide guidance on best practices, enforcement procedures and permitting processes. This is something beneficial to owners, investors, managers and various other entities in the professional property management space.
Preparing yourself for your short term rental and understanding the laws and regulations surrounding your specific rental situation can make a massive difference in the success and ease of marketing and advertising your rental space. We are here to help you in monitoring and tracking activity and compliance with short term rental activity.
How We Can Help Manage Your Short Term Rental Enforcement
Aside from helping you understand the laws and regulations surrounding your unique rental situation, we can also help you to manage your space effectively and efficiently and control any and all listings that may concern your property location. Our artificial intelligence, Talos, will comb the internet for listings that may match your property and organize all potential leads in a way that is easy to digest and fully understand. This is incredibly valuable in areas where even listing a short term rental property on the market can incur fines and fees due to strict banning or legislation requirements.
If you are allowing a tenant who has a traditional rental agreement, you may want to be able to fully monitor all of the listings they may or may not create and the permits they have to ensure everything is in compliance with regional code and legislature. Our software seeks out all of the listings associated with your property, approved or not, and compiles them in one easy to read place.
Furthermore, you can also count on us to seek out any noncompliant listings at at your properties. While we like to assume all tenants obey rental agreements, even if it means not short term renting the space, there are situations where a tenant may sublet their property. This leads to the need for a software that can track down unreported usages of your properties. We find listings that could potentially be part of one of your property addresses and report them back to you. If you believe it to be a match, you can have us reach out to the company for more information and have us assist you in removing the listing through our one-click notification feature.
The team here at Property Guard always has your back. We guarantee that we can provide the highest quality, most comprehensive tracking, and responses. We also back all of our products with twenty-four hours a day customer service, seven days a week. This allows us to fully cover you and always be there if you need us. With Property Guard on your side, you can count on your properties being fully compliant and safe!