Legal Restrictions to Renting Your Home on Airbnb or Other Rental Services

Is it legal to rent out your home to vacationers by using online rental services such as Airbnb or VRBO? It depends on several factors, such as where your home is located, what type of home you own, and how long you rent it out. And if you rent (don't own) your home, lease or rental agreement restrictions are also an issue. Unfortunately, legal restrictions on short-term rentals are not uniform and can be confusing. Moreover, short-term rental websites currently provide minimal help to prospective hosts to understand or comply with these laws.

Municipal Restrictions on Short-Term Home Rentals

Many cities, counties, and other municipalities have placed legal restrictions on short-term home rentals. These vary greatly from place to place. The restrictions in some cities are quite severe and make most short-term rentals illegal.

In many cities, short-term hosts are required to register and/or obtain a license or permit before renting their property. To register, the host must pay various fees, arrange to pay local occupancy taxes, and often comply with insurance or other requirements.

In New York City, for example, residential property located in a multiple residential dwelling unit, such as an apartment building, must be used only for "permanent resident purposes." This means that the property must be occupied by the same person or family for 30 or more consecutive days. It's illegal to have paying guests for less than 30 days; unless, of course, the property is a licensed hotel, bed-and-breakfast, or other similar business. However, there is an important exception: It's not illegal to rent a room in New York City if you occupy your home or apartment at the same time and all parts of the dwelling are available to the paying guest. Violations of the New York law can result in fines of $1,000 to $5,000 for a first offense. Moreover, New York City requires that home-sharing platforms like Airbnb share data about listings and host to help it enforce these rules.

New Orleans has similar restrictions on the period of short-term rental use. Its local ordinance prohibits property owners from renting their homes or apartments to anyone for less than 60 days in the French Quarter and certain other areas in the city.

Other cities utilize their zoning laws to limit short-term rentals. For example, in San Luis Obispo County, California, a short-term rental home may not be located within 200 feet of a similar rental on the same block. Others impose occupancy limits—for example, in Isle of Palms, South Carolina, the limit is two people per bed plus an additional two people.

On the other end of the spectrum, some cities and municipalities have much more liberal rules. This is the case, for example, in Palm Desert, California, which adopted an ordinance allowing short-term rentals of up to 27 days provided that an annual permit is obtained and a 9% transient occupancy tax collected and paid to the city. San Francisco enacted an ordinance permitting short-term rentals of an entire property for up to 90 days per year, but limited it to owners who live in their property at least 275 days per year.

In the past, these legal restrictions on short-term home rentals described above were haphazardly enforced at best. Typically, due to a lack of manpower, cities and other municipalities didn't spend much time or effort on this issue. Usually, enforcement efforts were undertaken only after neighbors complained. However, this is changing in many areas, as short-term rentals have grown increasingly popular and made it more difficult for residents to find long-term rentals.

Legal Restrictions on Owners of Condos, Coops, and Planned Developments

If you live in a condominium, cooperative, or planned development, your use of your property is governed by deed-like restrictions commonly called covenants, conditions, and restrictions (CC&Rs) or bylaws. These may bar short-term rentals entirely, or subject them to restrictions. Unlike zoning laws or local ordinances, CC&Rs are enforced by the homeowners' association (HOA) or coop board, which may impose fines on violators and place liens on the property to collect them.

Lease Restrictions on Renters

If you are a renter, you need to carefully check your lease before renting your apartment on a short-term basis. Most leases contain provisions restricting or prohibiting short-term rentals and sublets unless the landlord's permission is obtained in advance. If you violate your lease, you could get evicted by the landlord.

How to Find Local Laws and Other Legal Restrictions on Short-Term Rentals

The Airbnb website has a summary of the legal requirements of about 100 cities and counties, with links for more information. If your city isn't listed there, the first place to check is your local municipal or administrative code, which might be available online at your local government's website. To find yours, check out State & Local or Municode.

A call to your city's zoning board or local housing authority could also prove fruitful. You might also check out the Short Term Rental Advocacy Center for information on restrictions on short-term rentals.

If you own a condo or coop, ask your homeowners' association or coop board about its short-term rental policies.

If you're a renter, check your lease or rental agreement and talk to your landlord before renting out your unit.