Short-Term Rental Regulations Clause
(Operator Residency Requirements) (Municipal)

Summary

This short-term rental clause template addresses operator residency requirements. It may be modified for use in municipal draft legislation allowing residents to offer their residential property as short-term rentals or short-term vacation rentals (STRs). Modify terms used in this clause to comport with the terms in the draft legislation. This template includes practical guidance, drafting notes, and an alternate clause. STRs differ from long-term or full-year rentals and there are often different registration and permitting requirements for each. See, e.g., Greece, New York's STR permit requirements and Beaufort County, South Carolina's STR requirements. STRs typically consist of rental periods ranging from approximately 30 consecutive days or less to up to 6 months, depending on the jurisdiction. See, e.g., NYC Administrative Code 26-3101 (29 consecutive days or less) and Surfside, Florida Code of Ordinances Sec. 90-41.1 (6 months or less). Many municipalities require that a private individual, as opposed to an investor, own and occupy the STR property on either a full-year or part-year basis as its primary place of residence, but legal challenges to these residency requirements have begun to surface. Where properly regulated, STRs can provide property owners with an income stream that assists them in keeping properties in good order, condition, and repair. This helps to maintain property values and strengthen a municipality's overall economy. In addition to increased tax revenue and additional income to owners, STRs will often yield increased revenue to local restaurants, bars, attractions, and other businesses. However, absent appropriate regulation and control, STRs may negatively impact municipal areas and neighborhoods through an overabundance of commercialization, cause a disruption to residential communities, and compromise a municipality's goals of maintaining the residential character of an area. For more information on STRs, see Short-Term Rental and Occupancy Regulations. For additional STR clause templates, see Short-Term Rental Regulations Clause (Permitting Process) (Municipal), Short-Term Rental Regulations (Recordkeeping) (Municipal), Short-Term Rental Regulations (Taxes and Fees) (Municipal), and Short-Term Rental Regulations (Violations and Penalties) (Municipal).