States enact new laws regulating short-term vacation rentals (AZ, MA, WA – 2019)

By Deborah Goonan, Independent American Communities

City and town governments have been regulating short-term and vacation rentals for several years, especially with the growing popularity of online rental platforms such as Airbnb, HomeAway, VRBO, and others.

Advertisements

The battle over short-term rentals is controversial, often pitting neighborhood residents against owners and investors who earn substantial profit sharing their home.

Local regulation typically results in inconsistent, piecemeal regulations from town to town.

Not wanting to miss out on the opportunity to collect additional tax, several states have enacted short-term and vacation rental regulations in 2019.  Regulation faced stiff opposition from Realtor Boards, Chambers of Commerce, investors and private citizens.

Many municipal and county governments would have preferred to hold onto local control, with out state law preempting their authority to restrict short-term rentals.

Nevertheless, supporters in Massachusetts, and Washington state were successful enacting statewide regulations, while Legislators in Arizona fine-tuned a statute enacted last year.

 

Arizona

HB-2672 Vacation rentals; short-term rentals; regulations

HB-2672 allows counties and municipalities limited authority to regulate short term rentals. The bill was introduced by Rep. John Kavanaugh (R), in response to constituent complaints of rentals used as “party houses,” creating public nuisances.

Signed by the Governor in May 2019, the following changes apply to short-term rentals in Arizona:

Counties and municipalities now required the owner of a short-term rental property to provide contact information for receiving complaints against the property.

Counties and municipalities can send a notice of violation to the property owner, as well as the department of revenue (Short-term and vacation rental property owners are required to register and pay taxes on income from rentals.)

Limits rentals to residential uses. The property cannot be used for events or commercial activity that would otherwise required a permit, such as wedding receptions.

To inform renters of local laws and ordinance, the property operator must include a list of restrictions and rules on advertisements and post in a conspicuous place on the rental property.

Authorizes penalties against the owner-operator of $250 to $1,500 per violation. Property owner can appeal fines, and a hearing officer may reduce or waive fines under certain conditions.

References:

HB-2672 House Chaptered

Arizona governor signs law regulating short-term rental ‘party houses’ — but does it do enough?
Lorraine Longhi and Ryan Randazzo, Arizona Republic | Published 7:10 p.m. MT May 21, 2019


Massachusetts

Chapter 337 AN ACT REGULATING AND INSURING SHORT-TERM RENTALS.

In December 2018, Governor Baker signed a new law regulating short-term rentals, which goes into effect July 1, 2019.

The new law implements the following:

Requires short-term rental operators to register with the state. Cities may also required registration.

Owners and operators of short-term rentals must collect and remit the following taxes: 5.7% state, up to 6% local tax, Cape Cod & Islands Water Protection Fund: 2.75%, and, for owners of multiple properties, a Community Impact Fee of up to 3%

Owners that rent their property for less than 14 days in a calendar year are exempt from tax payments.

Owners or the hosting platform must provide liability insurance coverage of at least $1 million for each stay.

Cities and towns may also require health and safety inspections.

References:

Details on the New Massachusetts Short-Term Rental Law, Cape Cod & Islands Association of Realtors

Read the details of Chapter 337


Washington State

Substitute HB 1798, AN ACT Relating to short-term rentals; adding a new chapter to Title 64 RCW; and prescribing penalties.

In May 2019, Governor Inslee approved a new act regulating short-term rentals.

The new law implements several provisions:

Defines a short-term rental as lodging provided for less than thirty days. But it does not apply to “ A dwelling unit that is occupied by the owner for at least six months during the calendar year and in which fewer than three rooms are rented at any time”

Short-term rental operators must pay local, state, and federal taxes, inluding occupancy, sales, lodging, and other applicable payments, just as owners and operators of hotels or bed and breakfasts.

First violation gets a warning letter. After that, the violation is considered a class 2 civil violation under chapter 7.80 RCW.

Owner or operator must provide emergency contact information, for the purposes of  receiving complaints or notices of violation.

Short-term rental operations must maintain primary liability insurance of at least $1 million, or rent property through a rental platform that provides at least $1 million liability coverage. ♦

Reference:

SUBSTITUTE HOUSE BILL 1798, Chapter 346