In 2022 it was hard to look for news in the short-term rental industry and not see articles or interviews about the changing laws and ordinances that allow short-term rentals to operate.
The short-term rental period is commonly defined as any consecutive stay longer than 1 day and less than 29 days. Not all places allow short-term rentals, and new laws and restrictions could catch up to you if you’re not paying attention.
Here are 5 steps to make sure your STR is legal and stays that way.
- Check the STR rules and regulations in your state and city and make sure you understand the laws in your jurisdiction. Business Licenses, Zoning Rules, Housing Standards, Special Permits, Taxes, Landlord-Tennant Laws, and HOAs (Homeowners Association) are all important regulations to consider. Depending on where you live, all of these, some of these, or more than these regulations may apply to your property. If you are not sure where your business stands, it’s important to call your local government or consult legal advice to get the right answers.
- Obtain all necessary operating permits. Once you understand the laws and regulations, it is important to act fast and ensure you can legally operate. An Airbnb in New York City is already the target of a major lawsuit filed in the Manhattan Supreme Court last July. With all of the new laws and regulations put in place, a seemingly innocent Airbnb could become a major headache.?
- Check the Taxation Rules. In December, the Steamboat Pilot reported that Steamboat Colorado’s City Council had finalized an up to 9% tax on STRs. That taxation took effect on January 1st, 2023, however, reservations made before that date are not subject to taxation. On the bright side, the money will be put toward affordable housing projects, which will help many local workers remain in town during their seasonal jobs on the mountain.
- Make sure you are in compliance with safety and insurance regulations. Most homeowner insurance policies exclude claims that relate to business activity, which would leave most of your claims to be denied. Before you apply for a short-term rental insurance policy, make sure you do your research. Many amenities, such as bikes, pools, gyms, and hot tubs, may not be covered. Insurance can be expensive, but it’s worth it, so don’t skip out.
- Be a good neighbor, and ensure your guests are too. Following the golden rule “treat others the way you want to be treated” is always a good idea. But in this case, it’s majorly important. Short-term rentals want to be seen as something that adds to the community in a positive way, stimulating the economy and bringing tourists from all over the world. Giving STRs a bad rep only hurts your business and your right to operate. With more city councils facing concerns about the negative impact of STRs in certain cities, it’s important to have as many advocates as possible. Your neighbors are a great place to start.
For more helpful tips, visit www.dackinc.com
