Virginia AirBnB bill in state legislature

[Charles Huang]

As an attorney I wrote a synopsis of a bill that is being considered by the state assembly this session making AirBnB rentals legal across the whole state. As RE investors, I thought it would be relevant. Contact your local representatives if you're interested in seeing this pass.

The bill and its full text can be found at here.

The Virginia State Assembly has the proposed Limited Residential Lodging Act (the Act) for consideration in 2017 which would have an impact on short term rentals and bed and breakfasts across the state. The Act, if passed in its current form, would supersede any local regulations and permit residents in residential zoned areas to rent out parts of their home on hosting platforms such as Homeaway and AirBnB. This could provide Virginia residents the opportunity to rent out parts of their home as a matter of right, as opposed to having to undergo a permitting process with county or municipal zoning authorities.

The Act allows Virginia homeowners to qualify as a “limited residential lodging operator” if the homeowner occupies the property as his or her principal place of residence and is entitled to a homestead exception. The Act also allows Virginia tenants to be operators if the tenant treats the dwelling unit as tenant’s principal place of residence. If the Virginia resident qualifies as an operator, then the Act permits the homeowner to rent out the unit or a portion of the unit for a period of less than 30 consecutive days. Furthermore, if the operator only rents out their property for fewer than 45 days a year, the operator would not be required to register for a business license.

However, the Act would impose a handful of requirements on the operator and hosting platforms while also permitting local authorities to impose any set of additional requirements. The Acts mandatory requirements consist of recordkeeping requirements. An operator must keep records spanning four years demonstrating the primary residence of the operator and must keep a record of the dates of guests lodging at the property and the number of lodgers. Additionally, the operator, if not informed otherwise by a hosting platform the operator chooses to use, is required to register with the Virginia Department of Taxation for a tax identification number and furthermore, to collect and remit any applicable taxes. A hosting platform may elect to collect and remit taxes on the operators behalf, but must inform the operator.

In addition to these recordkeeping requirements, the Act permits local municipalities the option to mandate additional requirements. Of particular note, municipalities may elect to require operators to carry insurance coverage of at least $500,000 either personally or through their hosting platforms. Another electable requirement includes requiring operators to provide their contact information, a list of emergency numbers, and locations of fire extinguishers. Finally, another requirement would include limiting the maximum number of lodgers to twice the number of sleeping rooms plus four.