Client Alert: District of Columbia Updates Short-Term Rental Rules
Date: February 4, 2022
By:
Kevin A. Kernan
New Legislation in the District of Columbia
The Short-Term Rental Regulation Act of 2018 (the “Act”) took effect on Dec. 3, 2021, and DCRA began accepting applications on January 10, 2022. The Act creates two new categories of a basic business license: Short-Term Rental and a Vacation Rental (collectively, “Short-Term Rental”). As long as the host has a proper license issued by the Department of Consumer and Regulatory Affairs (“DCRA”), there are no neighborhood or zoning restrictions within the District as to where a Short-Term Rental can operate. However, there are special rules for such rentals within Associations.
Fortunately, this new legislation does not alter an Association’s express prohibition on short-term rentals. In fact, the host must attest that the Association’s governing documents do not prohibit owners from operating Short-Term Rentals, or that the host has received written permission from the Association to do so. Additionally, the host must be a natural person and the property must be the host’s primary residence. Investment properties and those owned by corporate entities are not eligible.
The Act makes a distinction between a Short-Term Rental and a Vacation Rental, and it’s important for an Association to know the difference. A Short-Term Rental allows for a host to offer lodging at their primary residence while the host is present on the property (e.g., a bedroom within the home). There is not a limit to the number of stays a Short-Term Rental can be offered in a calendar year, but each stay may not exceed 30 continuous nights. A Vacation Rental allows the host to offer lodging at their primary residence without being present on the property. Vacation Rentals cannot exceed 90 nights in any calendar year and each rental is limited to 30 or fewer continuous nights. However, the host for a Vacation Rental may apply for an exemption to the 90-night rule if the host is forced to leave the District for reasons out of their direct control. Each Rental is limited to eight guests, or two guests per bedroom, whichever is greater.
The Director of DCRA may refuse to issue or renew, or may suspend or revoke, a license for reasons including the making of any false statement on the license application or by not abiding by the requirements set forth in the Act. If there is a complaint regarding a Short-Term Rental or Vacation Rental or a question concerning the validity of a license, it can be submitted through the District’s hotline number by calling 202-221-8550.
Reminder: Existing Virginia and Maryland Rules:
As a reminder for community associations operating in Virginia, § 15.2-983 allows a locality to adopt an ordinance to establish a local registry of short-term rental properties, however, the law does not change any existing restrictions found in the Association’s governing documents. If a locality adopts a registry ordinance, it may include a penalty not to exceed $500 per violation for an operator that fails to register and the suspension of the right to rent until the operator pays the penalty and registers the property.
In Maryland, each county may have its own regulations and restrictions, so it is important to look for specific short-term rental rules in your county. For example, Montgomery County adopted legislation that allows short-term residential rentals such as Airbnb under certain parameters, but the Short-Term Rental must not be prohibited by the Association’s governing documents. The legislation requires homeowners to apply for a short-term residential license and defines Short-Term Residential Rental as the residential occupancy of a dwelling unit for a fee for less than 30 consecutive days and is not a Bed and Breakfast. The Short-Term Rental must be the primary residence of the property owner and the maximum rentals in a calendar year is limited to 90 days if the owner is absent. The total number of adult overnight guests is limited to six, with two overnight guest maximum per bedroom. If you have any questions for the attorneys at Whiteford, Taylor & Preston, LLP, regarding this or any other issue, please feel free to contact us at any time.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.