Are you thinking about listing your property as a short-term rental or do you already have a property listed as a short-term rental in Massachusetts? If so, then you may know there are laws specific to short-term rentals you must abide by. The rules can be complex and failure to comply can mean penalties. Having an experienced short-term rental attorney guide you through the process is the only secure way to make sure you do not encounter any legal issues.
At Sandonato Law, we help our clients understand local laws and Massachusetts new short-term rental law as much as we make sure you are in compliance. Contact us today if you have questions about your short-term rental in the greater Boston metropolitan area.
What constitutes a short-term rental in Massachusetts?
A short-term rental is an occupied property where at least one room is rented out by an "operator" through advance reservations. An operator is a person who operates a short-term rental. Short-term rentals are rented spaces that do not exceed 31 consecutive calendar days and can include:
- an apartment;
- a house;
- a cottage; or
- a condominium.
To be clear, a short-term rental is not a hotel, motel, lodging housing, or bed and breakfast establishment. It is also not a time-share or a month-to-month tenancy.
An intermediary (or operator's agent) may be used in place of an operator to arrange and collect rent for a short-term property rental. An intermediary can be a broker, but today is more commonly a hosting platform, like:
- Airbnb;
- EasyRoommate;
- HomeAway;
- 2nd Address;
- VRBO;
- Booking.com; or
- Flipkey.
What does Massachusetts Law Require from Short-Term Rentals?
Boston has been home to some of the strictest laws in the country regulating short-term rentals. But on July 1, 2019, a new state law came into force, providing for greater regulation and taxation of the industry as well as allowing local governments – like Boston – to continue to enforce their own regulations.
This new state law requires the following from short-term rental hosts:
- register with the Department of Revenue;
- collect state room-occupancy taxes from guests;
- file monthly lodging tax returns and possible local lodging taxes (Boston's local lodging tax is 6.5 percent);
- pay taxes;
- possess $1 million in liability insurance unless using a short-term rental platform that has its own insurance policy equal to or greater than $1 million; and
- advise the insurance company that you operate a vacation rental.
Under the new state law, local governments regulate licensing and registration, health and safety, and other matters directly related to short-term rentals.
Boston specifically requires city registration for short-term rentals and does not allow short-term rentals in apartments or in a property where owners do not live.
State-wide, short-term rental platforms must:
- register with the state;
- report its total rent or revenue of operations;
- collect state and local taxes from guests;
- file tax returns; and
- pay all owed taxes.
What are common legal issues that arise with short-term rentals in Massachusetts?
Short-term rental operators or intermediaries can face certain legal issues involving their rental units. Of particular concern are illegal rented spaces and the profits obtained from those rentals.
Many of the legal issues that often arise with short-term rentals are addressed in the state's new short-term rental law. These issues were/are:
- whether a license is required (e.g., lodging house license, innkeeper license or rooming house license);
- whether the rental unit complies with condominium rules and regulations;
- whether guests qualify as tenants;
- whether the rental unit complies with apartment leasing agreement;
- whether the rental unit violates zoning bylaws; and/or
- whether the rental unit poses questions for homeowner or mortgage insurance policies.
Contact a Short-Term Rental Attorney in Boston Today
If you have questions about a property you want to turn into a short-term rental, contact Sandonato Law online or at 617-481-2742 today. We have the answers and guidance you need.