One of the great advantages of starting a vacation rental business is the relatively low barrier to entry. One complication, though, is staying on top of short-term rental regulations, which can have multiple layers of laws and ordinances.
This is doubly complicated if you operate multiple units across more than one state, country, city, or town, as each can have its own set of zoning ordinances, responsibilities, and residential rules, ranging from waste management and noise levels to occupancy limits.
In this article, we discuss what areas of short-term rental law you should understand, we provide examples of the ways licensing laws vary across regions, and we look at the penalties you could face if you don’t follow the correct procedures.
You’ll also learn what steps to follow to stay compliant and see actionable advice on how to manage your properties and processes so you can avoid any legal issues.
This includes insights on what software to use to automate tasks so you can protect your business and reduce your workload.
Short-term rentals (STRs) are usually considered to be furnished houses or apartments that are rented for short periods of time, normally less than 30 days. But STRs aren’t always houses or apartments, and guests sometimes stay longer than a month.
For example, in waterway-strewn Amsterdam, STRs are referred to as “holiday rentals,” they can be homes or houseboats, and they’re distinguished from bed and breakfasts (B&Bs), which have their own set of regulations (though they don’t include having to offer breakfast).
Meanwhile, it’s common for digital nomads, renters who work remotely from various travel locations, to stay at STRs for several months at a time.
Due to the huge growth of the STR industry over the last decade or so, and because of the potential for STRs to impact local economies, affect long-term housing availability, and bring about safety and nuisance concerns, regulations have quickly come into being across a range of jurisdictions.
These jurisdictions don’t just include countries and states, but also counties, cities, and towns. And they may relate to a range of issues, including zoning restrictions, occupancy limits, noise levels, and safety standards.
So, being compliant is to understand your local STR regulations—and keep abreast of how these evolve since STR regulations often undergo regular updates.
As a vacation rental property manager, this could be crucial to not just your service standards, but to your ability to retain legal permission to operate in a given area, which we look at next.
You may need a number of licenses and permits to operate your STR business. For example, in most jurisdictions in the US, businesses require a general business license. On top of that, you may need to apply for multiple short-term rental licenses—but not necessarily.
For example, in Florida:
As you can see, the complexities of registering and licensing your STR business vary significantly by location. But once you’ve completed the process of legitimizing your operations, renewing certificates and permits in the future should be much easier.
Plus, it pays to follow the correct procedures.
The fallout from operating a short-term rental business without the formal permits and licenses will depend on your local laws and regulations. Here are some examples of what to expect:
To ensure you’re in keeping with the law, and to avoid a costly payout, you should follow a few best practices, which we discuss below.
Short-term rental regulations often aren’t only a question of your business practices, but also the local rules and guidelines of multiple jurisdictions.
Nevertheless, with a methodical approach to compliance, and by following the five steps described below, you can protect your business, property owners, and guests from experiencing any issues.
As discussed, depending on where your operations are based, you may have several hoops to go through to be compliant.
Here’s a list of some key areas you should look into when researching the STR regulations for your business, including some which we’ve already touched on:
With your research in the areas mentioned above done, you should gather the necessary certification and complete any related application fees. However, licenses aren’t always a requirement—for example, in London, UK, no special permission is needed as long as you don’t rent for more than 90 nights in a calendar year.
Where permits are required, take a leaf out of the Virginia Beach rulebook (see below) by making them visible to potential guests, showing them on the premises and your direct booking website. This will instill confidence in guests and showcase your professionalism.
By now, you should be aware of what safety regulations you'll have to follow. For example, your short-term rental properties may require fire extinguishers, clearly signed emergency exits, or hand railings. You might also have to establish maximum guest limits, install noise detectors, or fence pools.
Be sure to clearly communicate to guests what measures you’ve implemented, how they can play a role in their own safety, and what they can do to avoid causing disturbances. One way to do this is with pre-stay messaging.
It might not be a legal requirement for you to record all your completed tasks and interactions, but doing so can protect you in the case of disputes with guests, prove your team has carried out key safety checks, and provide a history of cigarette smoke monitoring, indoor monitoring, and outdoor noise monitoring.
Where possible, automate this process with short-term rental technology so keeping records doesn’t mean any additional manual tasks for you or your team. This ensures your internal processes are efficient and scalable (we look at examples of how to automate record-keeping in the following section).
Whether it’s a revised local zoning ordinance, an update to rental registration procedures, or a new bylaw on parking restrictions, local and state laws can change. So, you need to stay informed and be prepared to reassess your compliance efforts over time.
By attending official gatherings like city council meetings, you can not only keep abreast of the latest developments, but also have your voice heard and potentially play an active role in shaping local regulations and guidelines by voting on proposed policies.
The following actionable tips will help you follow the steps described above, keep up to date with the latest developments in local law, and manage your guests to minimize the chance of them breaking the rules.
Joining a local group of peers is probably the single most helpful action you can take to understand the issues facing STR property managers in your area, and learn how to resolve challenges like obtaining licenses or following the rules on matters like waste collection, noise pollution, and parking.
By doing this during your research stage, you could find out your local administrative or municipal code, which legal expert to speak to, or what law changes to anticipate next.
You’ll be able to ask questions of people who’ve already solved your problems, and it’ll help you stay informed of any changes.
Many jurisdictions have strict rulings on the acceptable noise levels of vacation rental properties as part of their zonal ordinances. But even where these aren’t present, there could be nuisance laws in place within state law that regard excessive noise as a misdemeanor.
Equally important, though, is protecting your homeowners from complaints from neighbors, which can escalate quickly to create ongoing tensions and even include the police.
With this in mind, consider installing Minut’s privacy-safe noise monitoring system. This provides you with automated alerts when noise exceeds your pre-set thresholds, and automates messages to guests requesting that they keep the noise to a minimum.
The Minut standalone device isn’t just a noise monitor, though—it’s also an occupancy monitor, a cigarette smoke detector, and an all-in-one home safety solution with features including:
With real-time insights into noise, occupancy, and security across your entire property portfolio, you can have greater peace of mind, be kept informed of any issues as they arise, and stay compliant with local and state regulations on STR noise levels.
Effective guest communication with clear guidance, advice, and instructions will help you stay compliant with short-term rental ordinances on noise, parking, pets, trash collection, and safety.
The problem you may face, though, is managing all those messages across multiple stays and 20+ dwelling units, each with their own special requirements and specifications.
You can address this with STR software that integrates with your PMS and online travel agencies (OTAs).
For example, with Minut, you can create message templates that use booking data from your property management system (PMS) and OTAs to auto-populate each message with stay-specific information, like home and guest names as well as check-in and check-out dates.
Plus, you can use these scheduled messages to include information on house rules and local regulations, and a link to your digital guidebook, where you can provide further details and recommendations for their stay.
Here’s a typical workflow of guest messaging you can use to improve the guest experience, minimize manual messaging, and keep the guest informed of any rules and regulations:
If you’re messaging guests directly within an OTA, it’s normally easy for you to track communications and keep a record of general booking information. But it can also be useful to keep a record of guest behavior in case there’s a complaint or if there are any content damages. Equally, if you’re taking direct bookings, you’ll need your own way to record all the details of a stay.
Specialized vacation rental software will help you keep and access records—here are three examples of how:
By automating key areas of your management processes, guest communications, and task tracking, you can easily maintain a log of events across your STR portfolio to protect the integrity of your business practices and to use as evidence in the case of an accident or dispute.
Sadly, there’s no silver-bullet solution to managing the various laws and regulations that make up your responsibilities as short-term rental property manager.
But, by connecting with other property managers in your area, reaching out to local homeowners’ associations, and with the support of automated solutions for noise monitoring and record-keeping, you can stay compliant, and even reduce your manual tasks.
To do this effectively, you should research not only what licenses and permits you need, but also areas like noise and nuisance policies, health and safety guidelines, building codes, accessibility laws, and parking restrictions.
Then, by communicating effectively with guests, and by utilizing specialized software to monitor behavior and schedule messages, you can rest easy that your properties are well looked after, and your practices are in keeping with the latest regulations.
