In recent years, the tourism industry has seen the rise of internet-based, short-term rental by owner sites and apps, such as Airbnb and VRBO. These short-term rental options allow property owners and tenants (when permitted under certain circumstances) to directly lease or rent their property on a short-term basis to interested lessees; and individuals are able to stay in a residence for cheaper than an equivalent hotel, and often without the need to make reservations far in advance. While this model certainly provides flexibility and income/savings to the parties involved, it is important to remember that this model is not universally permitted throughout the United States; but rather is governed at the local level by municipal ordinances.
In recent months, some New Hampshire municipalities have begun to crack down on short-term rental by owner arrangements and challenge the legality of these options under local law. In Portsmouth, for example, the City has served cease-and-desist orders on rental properties under this model because the short-term leases are considered “transient occupancy” under the Ordinance (distinct from month-to-month and long- term leases), a prohibited principal use in some of the City’s residential districts. The City’s decision, handed down by Portsmouth’s Zoning Board of Adjustment (“ZBA”), was recently upheld by the Rockingham County Superior Court. View the ZBA’s full deliberation and decision here.
While the allure for property owners to utilize Airbnb and other direct rental by owner services is clear, property owners should make sure to determine the legality of such arrangements in accordance with local rules and regulations prior to advertisement and rental. For more information on short-term owner rentals and compliance with local regulations, please contact Liz Nolin at (603) 227-6286.