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Nov
29

The hidden pitfalls of booking a home for a short term rental. When is it legal and when is it not?

Maui villa for rent

Maui villa for rent

The new dilemma for travelers—though I must admit not such a dilemma for me—is hotel or house. Because of the booking cost of hotels and the tiny rooms, poor service, and generally bad experience over all, many people are beginning to grapple with looking into a new way of traveling.  But for me, when given the choice between a hotel for my family on vacation or a home, I jump at the chance to rent a house. Whether in the US or in Europe, it just makes so much more sense for a family on vacation.

Until now.

The resurgence of home rental websites such as VRBO and Airbnb and Homeaway are making a lot of enemies out there. The sudden arrival of vacationers is prompting neighbors in places from New York state to  Dana Point in southern California to tiny Columbia Falls, Mont., to make it clear that they are not zoned for it and do not want it. In effect, renting out your home is banned in many places you just might be looking to rent.

And that’s where it can sticky for us vacation renters. The last thing I want to be involved with is illegally renting a property while on vacation. Dirty looks from neighbors, disputes over parking and trash? Who needs it? So how do you know what’s legal and what’s not? That’s what I wanted to find out.

Home Rental beware

Home Rental beware

The number of Americans renting their homes to strangers has been driven in part by the weak economy, the housing bust and the Internet. In some cases, cash-strapped homeowners are renting their properties to supplement their incomes and to keep from falling into foreclosure. Home-rental listing sites, such as HomeAwayand Airbnb, have aided the trend by providing a service that allows homeowners to advertise their properties, essentially turning their homes into pop-up motels.

And as I mentioned many of the areas you’ll find them in have put up bans against them. So, you are in effect, renting an illegal unit and could encounter an angry mob. Okay, maybe not angry, but you may get into a conversation you should not have to get into while on vacation.

For example:

sedona

sedona

In Sedona, Ariz., there’s a ban on short term rentals.  Homeowners are challenging the ban but as of yet it has not been resolved. Before renting here, please check with the city to make certain the rental is legal.

VRBO_Map_FL

VRBO_Map_FL

But if you’re looking in Florida, you’re in luck. Courts ruled earlier this year against a Fort Lauderdale, Fla., regulation that prohibited short-term rentals in residential neighborhoods. In most places, a short-term rental is defined as lasting less than 30 days.

Such efforts are about to get more ammunition: A group of short-term rental-listing sites, including HomeAway and FlipKey, are creating an industry group that aims to institutionalize the practice by pushing cities to tax and regulate short-term rentals.

check before you book

check before you book

In Austin, short-term rentals are banned in some places. But Carl Shepherd, chief strategy and development officer for Austin, Texas-based HomeAway, said the group will push cities to enact “light” regulations that steer clear of license and zoning changes but make it easier for municipalities to identify short-term rentals and collect occupancy taxes from them.

Hawaii is another hot spot in the debate.

maui_map

maui_map

The Maui County Council passed an ordinance that will allow 400 Maui home owners to obtain permits for legal short term rentals (formerly known as Temporary Vacation Rentals – TVAs).

But they must have permits. In the old days, the practice of renting accommodations to travelers in areas not permitted by zoning had been pervasive on Maui. Recent estimates of the number of properties offered for vacation rentals ranged between 1,000 and 2,000. Though officially this kind of use was not allowed, the law was seldom enforced except when there were complaints. Then many of them were shut down.

jewel of maui

jewel of maui

Short Term Rental Housing

County Ordinance 3941 creates a new category of permitted use called Short Term Rental Housing, and sets out the conditions and steps for permitting. Most of this information can be found in Section 19.65.

The purpose of the law is to establish a permitting process for short-term rental homes … “consistent with the county’s general plan and the state’s land use laws; to retain the character of residential neighborhoods; to provide varied accommodations and experiences for visitors; and to allow small businesses to benefit from tourism.”

A short-term rental home is defined as no more than six bedrooms on Maui and Lanai and no more than three bedrooms on Molokai. The total number of guests may be no more than twice the number of bedrooms.

Properties eligible for the new category must be single family structures constructed at least five years before the passage of the law.

A total of 400 short term rental homes permits are allowed on the island of Maui:

Hana: 48.

Kihei-Makena: 100; provided that, of which no more than five are in Maui Meadows. Flammer said that the provision restricting the number in Maui Meadows came at the request of that community.

Makawao-Pukalani-Kula: 40.

Paia-Haiku: 88.

Wailuku-Kahului: 36.

West Maui: 88.

So how do you know if your rental is a legal one? In Hawaii, they make it pretty easy.

Advertising a short-term rental home without displaying a valid permit number is prohibited. Such advertising is considered prima facie evidence of  a violation that  may result in enforcement action.

permit

permit

But the best way:  Ask the owner. Just ask—if they can’t give you a permit number then it’s a sure bet that they are operating illegally.

The owners of legal properties will be more than happy to supply the number. They’ll most likely announce their legal status on their websites, if they have them.

Oh and PS short term rentals are illegal in some spots in New York, up and down the California coast, you name it, there’s likely to be a debate over it. The logic is clear, residents don’t want unfamiliar people coming and going, I wouldn’t either. So please, before you book your next stay, be sure to get a permit number and avoid any possible problems.

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