Mar 23, 2013

I've written before about Where to buy a Vacation Home if you want to Rent by Owner, but one topic I've never mentioned is "regulation". A recent article in USA Today reminded me that there are many communities in the US which restrict owners from renting their properties for vacation - i.e. short-term rentals.

So if you're considering buying a vacation rental property in an area, how can you tell whether it is legal? You might think that just checking major listing sites, like HomeAway, for other properties in the area might be sufficient. After all, if there are other properties listed, then surely it must be legal. But it turns out there are quite a few vacation rentals operated illegally in areas where it is restricted by local regulations.


A much safer approach is to contact the town and/or the home owner's association where one exists. Not only can the town clarify any local ordinances that impact short-term rentals, they can also explain the procedures for paying the local occupancy or accommodation tax that you will likely need to collect from guests.

If the property you had your heart set on is indeed in a community which restricts short-term rentals, then there are a couple of resources you should be aware of. First, the Vacation Rentals: Regulations, Standards & Practices blog is a very useful source of information about the industry, recent lawsuits, and other legal matters.

Lastly, the major Vacation Rental listing firms have recently formed the Short Term Rental Advocacy Center (STRAC), with the following four guiding principals
  • We believe people have a right to rent their property on a short-term basis.
  • We believe the short-term rental marketplace brings tangible benefits to homeowners, residents, travelers and local communities in destinations around the world.
  • We believe local short-term rental regulations should be easy to locate, understand and comply with.
  • We believe existing “good neighbor” laws provide sufficient protection against any disruptive behavior on the part of long-term residents or their guests.
You can read more about the launch of STRAC in this press release.

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