Legal vs. Illegal Short Term Rentals

What makes a vacation rental property legal or illegal?

Is it time to start planning your summer vacation? Are you looking to make additional money? Before booking a vacation rental or listing your unit it is important to ensure any rental is a legal vacation rental.

An illegal vacation rental can result in fines, eviction or being kicked out of a rental in the middle of a stay.

Rent

When renting an apartment, condo or home a tenant is entering into a contract with a property management firm or owner of said property. Many leases restrict, limit or prohibit subleasing a property or extended guests. By listing the entire unit or offering the space as a section of the home to be rented as a shared space, many vacation rental properties violate the lease. As many properties require background and credit checks for any tenant or subletter - essentially anyone paying to stay needs to be vetted.

Own

Let’s say you own your home. This doesn’t guarantee you that you can list your unit as a vacation rental. Why? If you own a condominium or live in a gated community chances are your HOA (Home Owner’s Association) has rules and regulations to manage the property and protect your investment. Most condominium buildings limit the number of units that can be rented to non-owners. Often times there are waiting lists and it can take several years to have the option to rent your unit. Even if you have been approved to rent your unit the HOA may have restrictions regarding the rental. Many require the lease and tenant information be submitted, and prohibit short-term rentals.

City

Many cities have restrictions and laws in place that limit or restrict short term rentals. This is in place to protect housing rates, community and ensure affordable housing is available to residents. Cities like Austinhave taken measures to better identify housing options and have increased enforcement.