Legality and Regulations to Consider

When deciding to become an Airbnb host, it’s important for you to understand how the laws work in your city.

Some cities have laws that restrict your ability to host paying guests for short periods. These laws are often part of a city’s zoning or administrative codes. In some cities, you’re required to register, get a permit, or obtain a licence before you list your property or accept any guests.

Certain types of short-term reservations may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement.

For a list of city regulations in many U.S. cities, click your city below:

City Regulations

Business Licences

Many cities and counties require owners or operators of certain businesses to apply for and obtain a licence before the business can be operated. Because Airbnb operations commonly resemble business activity, a business licence may in some instances apply. Many local governments have sections of their website explaining the business licensing process, and can provide you with relevant forms and information.

Who to Contact: Your city or county for more information

Building and Housing Standards

Most local governments and many states have rules and regulations that specify minimum construction, design, and maintenance standards for buildings. These include regulations on habitability, health, and safety. Certain rules applicable to residential and non-residential uses may be relevant to your listing. Some cities or counties may also require an inspection of your property to make sure it meets minimum habitability standards.

Who to Contact: Your local government to find out what standards apply to your listing

Zoning Rules

Most cities and counties have laws that set out the way you can use your home. These rules are often found in a zoning code, planning code, or city ordinances. You should consult these rules or regulations to see if your listing is consistent with current zoning requirements or use definitions.

Who to Contact: Your local government

Special Permits

Some cities or counties require a special permit to rent out your home.

Who to Contact: Your city or county government to see if you need one; and, if you do, how to get it

Taxes

Many cities, counties and states require hosts to collect a tax for each overnight stay; and to then pay that tax to the city or county. These may include things like hotel/transient occupancy taxes; sales, or other turnover taxes such as Value Added Tax (VAT), Goods and Services Tax (GST), or income tax.

Who to Contact: Your local government to see if you need to collect any taxes

Taxes are discussed in greater depth in the Airbnb and Taxes section. Airbnb also provide a list of city regulations that exist for many U.S. cities. If you are a U.S.-based Airbnb host, you’ll want to take a look at Airbnb’s Responsible hosting in the United States webpage, which covers city regulations that apply to many major U.S. cities.

Permissions

In addition to city regulations, you may also need permission to host your place on Airbnb from landlords, Homeowner’s Associations, roommates and neighbors. Consider each of the following and get permission from any that are relevant to you before listing your place on Airbnb.

Contracts

Check your Homeowner’s Association or co-op board regulations to make sure there is no prohibition against subletting your place, or any other restriction against short-term rentals. Ensure you understand your rights and entitlements under any leases, timeshare ownership rules, condo board or co-op rules, Homeowner’s Association rules, or rules established by tenant organizations. Read your lease agreement and check with your landlord if applicable. You may consider adding a rider to your contract that addresses concerns and outlines the responsibilities and liabilities of all relevant parties.

Subsidized Housing

If you live in public, rent controlled, rent stabilized or subsidized housing; there may be special rules that apply to you. The manager of the property or your local Rent Board should be able to answer questions about this.

Roommates

If you have roommates, consider a roommate agreement in writing which outlines things like how often you plan to host, how you’ll ensure guests follow house rules, and even whether you’ll share revenue (if that makes sense for you).

Neighbors

Consider whether you should notify your neighbors about your plans to host, along with your plan for how to make sure your guests are not disruptive and remain respectful.

How to Have Difficult Conversations with Landlords

As touched on above, one of the challenges of hosting on Airbnb is simply getting the permission of landlords or Homeowner’s Associations for putting your place up on Airbnb.

Whilst it is entirely possible to try host your place on Airbnb without having gained landlord permission, it is equally likely that it’s only a matter of time till you get caught.

At best you’ve just damaged the trust and relationship you have with your landlord. At worst, you’re in breach of contract, liable for damages, susceptible to getting evicted, and likely to lose security deposits or rent already forepaid.

By default, the majority of landlords will not be supportive of your desire to put their place up on Airbnb.

The reasons for this are many and varied. As a relatively new concept, many landlords (especially older, less tech-savvy ones) will hold unfavorable perceptions of the “sharing economy” and short term rental platforms such as Airbnb. Other reasons include fears of property damage, being fined, voiding insurance policies, or additional inconvenience.

Before approaching your landlord, think about what their particular concerns are likely to be, and the recommendations you’ll put before them to mitigate whatever might be holding them back.

A lot of this will be circumstantial to the relationship you have with them, how long you’ve been in your place, what type of place it is, and the type of person you know your landlord to be.

Below are a few strategies for “winning over” your landlord. Not all of these ideas will be right for everyone so think though your individual circumstances to determine which of these might work best for you:

  • Improvements in upkeep: Show your landlord other high-quality listings in your area that demonstrate that hosting on Airbnb would actually increase the cleanliness, care and upkeep of their place.
  • Financial security: Explain that hosting on Airbnb will provide supplementary income that will enable you to continue paying rent as well as encourage you to re-sign upon the end of the current lease.
  • Share in earnings: Offer to provide a share of earnings or undertake to self-fund minor renovations or home improvements that add value to their property.
  • Neutralize property damage and personal liability concerns: Share information on the Airbnb Host Guarantee and Airbnb Host Protection Insurance Program that provides protection against property damage and personal liability. Also increase any security deposits currently held against you, or amend your existing contract to shoulder responsibility for certain types of damage.
  • Insurance policies: Offer to take out additional insurance policies that supplement any limitations of existing homeowner’s, landlord or rental insurance policies.
  • Limitations on hosting: Agree to limit Airbnb rentals to bookings of specific trip purpose (e.g. no bachelor parties), to specific times of the year, or to conditional arrangements (e.g. whilst you too will be staying in the home). Remember to remain mindful of the Airbnb Non-discrimination Policy when doing so.

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