“Airbnb Vrbo” Game: Is It Right and Legal for You?

Getting into the “Airbnb Vrbo” Game:

Is It Right and Legal for You?

By Timothy Burton Anderson

LEGAL

LEGAL

What do Joseph Smith, Abraham Lincoln, and Betsy Ross all have in common? You guessed it; they were each short-term renters. Each rented a room in the home of another family during a critical part of their respective stories. For a large part of our country’s history, boarding with another family was a very common part of life. It created safe—though not always comfortable—lodging for persons in transition and extra income for the host family. Then along came the post-industrial revolution and World Wars I and II, when the single urban home phenomenon took over. Along with it came planning and eventual governmental control in the form of zoning regulations that, in many cases, limited the extent to which one could rent out a home, either in full or in part. The reasons for this were varied, from managing traffic congestion to monitoring strangers to regulating taxation to protecting the local hotel and motel industry from competition. Whatever the reasons, the government became much more involved than in earlier times, and it has pretty much remained involved ever since.

Scroll forward to the 21st century. Boarding or, to use the present-day term, “short-term renting” is hot again. This time, with the advent of the app world drivers of Airbnb and Vrbo, it is profitable. One day, one week, or even one month stays allow the payment cycle to turn over very quickly. In effect, the property owner is selling the same product several times per month. For many, this is a much more advantageous use of their home, condo, or apartment than a longterm rental by the month or year. And in areas of high demand, such as Utah’s Dixie, Park City, or Moab, this can be extremely profitable. In fact, renting short term is now such a prevalent practice it is said that in Moab more than 50 percent of

the residences are listed for rent on Airbnb, Vrbo, or similar networks.

Needless to say, many municipalities don’t like this practice. They have passed ordinances that limit shortterm stays to residences only within certain areas. They have even passed ordinances preventing a property owner from advertising on Airbnb, Vrbo, and other short-term rental apps. Local governments are concerned about protecting their municipal neighborhoods from the congestion and problems of uncontrolled boarding. Then in 2017, the Utah State Legislature passed Utah Code Section 10-8-85.4 that forbids a municipality from enacting or enforcing an ordinance “that prohibits an individual from listing or offering a short term rental on a short term rental website,” or from fining, prosecuting, or otherwise punishing an individual solely for the act of listing or offering a short term rental on a short term rental website. This is an odd situation. The municipality may regulate the actual use of the residential property for short-term rental but may not prevent the use of the rental website to advertise and book the short-term rental. There are a couple of noteworthy things here: It is beginning to look like it is becoming more difficult for municipalities to enforce bans on short-term rentals. Some cities enforce it vigorously while others do not. And further, this is one of those odd circumstances where you can in effect legally advertise an illegal use. The legislature justifies its action as protecting freedom of speech as guaranteed under the Constitution. So the jury is still out on where all of this is going. Is the state moving in the direction of taking over the short-term stay issue to make more dwellings available at a time when rentals are harder to find? Does this restrict the municipalities enough that they will relax enforcement or enlarge the short-term rental zones? And—this is a big one— will HOAs eventually be prohibited from restricting short-term rentals? To accommodate an Airbnb or Vrbo agreement, a property owner must be legally allowed to rent. This is still the law. But realistically, “the times they are a-changin’.” Pay close attention to the law as it evolves in this area.

Timothy Burton Anderson has practiced law in the St. George, Utah, area for forty-two years. He works in the St. George, Utah, office of the Salt Lake City-based firm Kirton McConkie. His areas of emphasis are commercial and recreational real estate, zoning and planning issues, public lands issues, and international commercial transactions for Utah-based companies primarily in Canada, Europe, and parts of Asia.

LEGAL