New legal framework for short-term rentals passes the Legislature

HB 1798 establishes new requirements for those who operate short-term rentals and platforms that advertise these rentals, including consumer safety and liability insurance. The bill also subjects short-term rentals to the taxes, fees, and assessments paid by a hotel or bed and breakfast in the same jurisdiction – including occupancy, sales, and lodging taxes.

HB 1798 defines a short-term rental as a lodging use provided to a guest for a fee for fewer than thirty consecutive nights. A short-term rental is not:

• A hotel, motel, or bed and breakfast;
• 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;
• A dwelling unit, or portion thereof, that is used by the same person for thirty or more consecutive nights; or
• A dwelling unit, or portion thereof, that is operated by a charity organization, private foundation, or government entity and provides temporary housing to individuals (or their family members) who are being treated for trauma, injury, or disease.

Operators of short-term rentals must comply with the following consumer safety requirements:

• Provide contact information of someone available to respond to guest inquiries during the length of stay;
• Comply with all laws and regulations related to carbon monoxide alarms; and
• Conspicuously post the rental unit's address, emergency services contact information, floor plan with fire exits and escape routes, maximum occupancy limits, and operator contact information.

A city attorney must issue a warning letter for the first consumer safety violation. Subsequent violations are considered class 2 civil infractions.

Platforms that advertise these short-term rentals must:

• Register with Department of Revenue.
• Inform all operators using their service of the platform’s responsibility to collect and remit taxes.
• Provide operators with a summary of consumer safety requirements.
• Provide written notice to operators that their dwelling’s insurance policy may not cover the use of short-term rentals. The bill also requires operators to carry no less than a one million dollar liability insurance policy for the short-term rental, or to use a platform that provides such coverage.

HB 1798 now heads to the Governor’s desk for signature.