6 Legal Aspects of Short-Term Rentals
With the rise of Airbnb and VRBO.com, there has been a rise of short-term rentals in all parts of the country, in all kinds of neighborhood settings. Many people are buying investment real estate and using it for short-term rental purposes. Although we cannot give legal advice, here are some things to consider in your decision to seek further legal counsel.
The first point: The right to rent is a core property right. There are three things you can do with your single-family residence: you can live it in, you can rent it, or you can sell it.
The second point: Renting is a residential use. With things like Airbnb where investors own multiple properties, it is starting to edge into the territory of being a business. Even if it may be, it doesn’t defeat the residential status of the property.
The third point: You have the right to use your property for productive purposes, but it can’t interfere with your neighbor’s use and enjoyment of their property, or injure the community at large. Provided the behavior on your property does not cause a private or a public nuisance, you have the right to rent.
The fourth point: Because it is a core property right, it can’t be turned into a privilege.
The fifth point: While a vacation rental may be considered a business that could be subject to a business or occupational tax, renting is still a residential use, and remains that core property ownership right.
The sixth point: There are registration and licensing schemes that some communities are proposing to inspect and monitor what people are doing with their rental properties.
One of the most important ways we can help our clients who want to acquire short-term rentals is to know the local, state, and federal regulations that may apply in this situation.
In terms of local regulation, it is important to know what approach the community takes—addressing the situation using zoning codes, or non-zoning regulations, or a combination of both.
A community may only allow rentals in certain zones, or have regulations about how many rentals can be in one community. Zoning only regulates the use, not the user, so this is something to keep in mind when knowing your rights. An example of non-land use or zoning restrictions would be a licensing or registration requirement or quantitative/operation restrictions.
In addition, many homeowner associations have covenants that were set in place before short-term rentals rose in popularity. You should find out if there is a restriction in the documents from the start, but even if there’s not, you may be subject to them later. Despite what state law says, these documents function as a private contract and you could still fall under those restrictions.
We hope this is of help, but keep in mind that any action/decision you make should be supported by sound legal advice from a local area attorney who specializes in this field.
With the rise of Airbnb and VRBO.com, there has been a rise of short-term rentals in all parts of the country, in all kinds of neighborhood settings. Many people are buying investment real estate and using it for short-term rental purposes. Although we cannot give legal advice, here are some things to consider in your decision to seek further legal counsel.
The first point: The right to rent is a core property right. There are three things you can do with your single-family residence: you can live it in, you can rent it, or you can sell it.
The second point: Renting is a residential use. With things like Airbnb where investors own multiple properties, it is starting to edge into the territory of being a business. Even if it may be, it doesn’t defeat the residential status of the property.
The third point: You have the right to use your property for productive purposes, but it can’t interfere with your neighbor’s use and enjoyment of their property, or injure the community at large. Provided the behavior on your property does not cause a private or a public nuisance, you have the right to rent.
The fourth point: Because it is a core property right, it can’t be turned into a privilege.
The fifth point: While a vacation rental may be considered a business that could be subject to a business or occupational tax, renting is still a residential use, and remains that core property ownership right.
The sixth point: There are registration and licensing schemes that some communities are proposing to inspect and monitor what people are doing with their rental properties.
One of the most important ways we can help our clients who want to acquire short-term rentals is to know the local, state, and federal regulations that may apply in this situation.
In terms of local regulation, it is important to know what approach the community takes—addressing the situation using zoning codes, or non-zoning regulations, or a combination of both.
A community may only allow rentals in certain zones, or have regulations about how many rentals can be in one community. Zoning only regulates the use, not the user, so this is something to keep in mind when knowing your rights. An example of non-land use or zoning restrictions would be a licensing or registration requirement or quantitative/operation restrictions.
In addition, many homeowner associations have covenants that were set in place before short-term rentals rose in popularity. You should find out if there is a restriction in the documents from the start, but even if there’s not, you may be subject to them later. Despite what state law says, these documents function as a private contract and you could still fall under those restrictions.
We hope this is of help, but keep in mind that any action/decision you make should be supported by sound legal advice from a local area attorney who specializes in this field.