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Baltimore City Bill to Regulate Short-Term Rentals & Platforms

Baltimore City is the latest Maryland jurisdiction to pass legislation establishing a comprehensive framework to regulate short-term rental (STR) hosts and platforms such as Airbnb, FlipKey and VRBO.

“We applaud lead sponsors Council President Jack Young and Councilman Eric Costello, and the entire Baltimore City Council for passing this important legislation,” said Amy Rohrer, President and CEO of the Maryland Hotel Lodging Association. “We believe this legislation strikes the right balance between preserving home-sharing for Baltimore guests and residents and protecting Baltimore’s hospitality industry from those investors who skirt the law and use short term rental platforms to operate illegal hotels throughout the city.  The legislation preserves the fabric of Baltimore’s neighborhoods, protects guests and our communities, and ensures that hosts and platforms pay their fair share.”

Baltimore City Bill 18-0189 will establish the following:

  • A host may list only their primary residence. This ensures that real estate speculators or “illegal hotel” operators will not exploit STR platforms.
  • One unit may be grandfathered in by an individual meeting certain criteria and owning/operating a short-term rental prior to December 31, 2018.
  • Each host must have a license from the City, and pay $200 to renew it bi-annually. The licensing framework includes processes to suspend or revoke licenses and/or issue fines up to $500 for violations by hosts.
  • Hosts must follow basic rules in order to operate. They must be in compliance with city building, fire and related codes, keep records of all rentals, and designate/post an emergency contact in the unit.   They must be registered with the State Comptroller for collection of state sales tax and display their license numbers in listings advertising the rental.
  • Platforms may not collect fees for rooms booked on behalf of unlicensed hosts and may be subject to fines of $1,000 for violations of this provision.
  • Platforms must collect and remit applicable hotel taxes and keep records, available to the Housing Commissioner upon request, including a complete listing of all properties listed on the platform and the total number of nights/fees charged each time the unit was rented.

It is worth noting that this legislation has very strong platform accountability language that should withstand potential legal challenges brought by platforms in other jurisdictions.

Pending signature by the Mayor, collection and remittance of the hotel tax is scheduled to take effect December 31, 2018, with all other licensing requirements taking effect December 31, 2019.

By keeping the definition of STR as any guest that stays for 90 consecutive nights or less (as opposed to 30 consecutive nights), the bill hurts long term landlords who rent their properties monthly to low-income tenants who cannot afford to qualify for a 12 month lease or obtain utilities in their name. It will also significantly reduce availability for students; traveling medical professionals like residents, interns, travel nurses and others here for a few months; and medical patients undergoing long term treatment.

STR-Related Terms Defined

HOST – the owner of a dwelling unit who provides or offers to provide all or part of the dwelling unit for short-term residential use in exchange for a fee.

HOSTING PLATFORM (or simply “platform”) – an Internet-based entity that in exchange for a fee facilitates reservations of short-term residential rentals; serves as a conduit of communication between hosts and transient guests, or otherwise facilitates booking transactions for short-term residential rentals.

SHORT TERM RESIDENCE RENTAL means the use – facilitated in whole or in part by a hosting-platform – of all or any part of a dwelling unit to provide accommodations to transient guests for sleeping or lodging purposes in exchange for a fee for fewer than 90 days.

Highlights from Proposed Baltimore City Bill 18-0189

Host needs a license from the Baltimore Housing Commission

Host can only have one license for a permanent residence plus one additional dwelling unit

License has a 2-year term

Host must comply with the following:

  • City building, fire and health code requirements
  • Maintain a record of rentals
  • Make property available to inspection for compliance
  • Post license and emergency contact information
  • Remit hotel tax of 9.5% of gross amount paid           

 

 

 

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