Here are some legal situations to be aware of as a vacation rental owner.
Whether you already own a vacation rental home or are thinking about purchasing one, there are three legal challenges that you should be aware of from the start:
1. Lease agreements. It’s very important to use the proper document for the type of rental property you have. There are two types of rentals: short-term and long-term. If you use a long-term lease agreement on a short-term rental, it could be a problem if you have to evict somebody. On a short-term lease, you have the right to call the police and get the person out of the property. On a long-term lease, however, you’ll have to go through the eviction process to get them out, and that could take a long time.
2. Paying taxes. Every owner of a rental property is required to collect a sales tax from the tenant. Short-term rentals are taxed differently and are assessed a lodging tax, like a hotel or motel. If the normal long-term rental property sales tax is about 2% or 3%, the normal short-term rental tax is closer to 10% or 11%.
3. HOA restrictions. If you buy a home within a homeowners association, they have the right to change the rules and require “minimum rental days.” They could require you to rent the home for a minimum of 30 to 60 days at a time, meaning you couldn’t rent it out for a day or two at a time.
If you have any questions about short- or long-term vacation rental properties or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.