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6 Legal Points for Short Term Rentals

With the rise of Airbnb, there has been a rise of short-term rentals in all parts of the country, and in neighborhoods. Many people are buying real estate to use it for short-term rental purposes. In the most recent episode of their podcast, host Monica Neubauer talks with attorney Brian Blaesser about the different aspects of short-term rentals, tips to know, information about what regulations you might encounter, and how agents can best help their clients. Blaesser is a partner with Robinson & Cole LLP, and heads the real estate development practice in the firm’s Boston office. He is in charge of the firm’s consulting work for the National Association of REALTORS® (NAR), and has prepared over 1,000 analyses for NAR of state and local land use plans.

First: 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.

Second: 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.

Third: 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.

Fourth: Because it is a core property right, it can’t be turned into a privilege.

Fifth: 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.

Sixth: 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 agents can help their 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.

Information provided by: Center for REALTOR® Development (CRD).

For more information and access to this interview, see podcast episode 4 at www.crdpodcast.com.

 

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