By Ted Papadopoulos
The carbon-copy
industry must have cursed Xerox in the mid-1900s when it introduced
photocopying, resulting in a significant dent in their industry’s
From a user’s prospective there is a huge benefit in: a
guest being able to rent another’s residence on a short term basis while
visiting a particular area/city; and a host’s ability to offset their
overhead/expenses by renting their home when they are not using same. However,
who is responsible when there is a disturbance or damage caused by one of the
guest’s (or by the guest’s guest); and are the users thoroughly screened (i.e.
identity, criminal history, etc.) by the STR company (Airbnb, Homeaway, VRBO, FlipKey,
etc.)? Also, who should the guest contact or complain to if/when there is a
problem with the dwelling, and it is located in an apartment building or
condominium association? Finally, is the rent collected by the host considered
income/taxable? These are just a few of the questions for hosts, guests,
neighbors, politicians, and enforcement officers to consider.
In Massachusetts, it is imperative for landlords and HOAs
to be cognizant of their tenants’/unit owners’ expectations. Often times,
transients are not what tenants or unit owners expect to have as their
neighbors in their residential developments. Furthermore, most tenants expect a
higher level of security in large(r) apartment communities whereby their
landlord (or its managing agent) is reviewing and monitoring everyone that
comes onto the property grounds (i.e. common area pool, fitness gym, community
rooms, etc.). Tenants also typically assume that their neighbors will remain as
such for at least one year. As all
practitioners in the landlord/tenant realm know, nearly every lease contains
rules and regulations that are meant to limit a tenant’s (and their guest(s)’s)
conduct that could interfere with other residents’ rights to quiet enjoyment.
In the HOA setting, constituent documents often restrict and regulate an
owner’s ability to rent out their unit; and FHA financing for condominiums
requires a percentage of the units to be owner-occupied. Accordingly,
practitioners must consider the effects of STRs when advising their clients
about permitting/prohibiting same.
Last July, after
several months of conferencing, a joint committee of state legislators came to
a compromise between the Senate’s and House’s proposed bills for the regulation
of STRs; however, the compromise (House, No. 4841) was short lived when, on
August 1, 2018, Governor Baker refused to sign off, and returned the bill with
various proposed amendments.
Some of the governor’s noteworthy changes include: an
outright exemption for homeowners that rent out their units for fewer than
fourteen (14) days in a year; the definition of a short term rental
(specifically, the minimum number of days in a year that would classify/warrant
designation as a “short term rental”); as well as a limitation on the amount of
information to be made available in the legislature’s proposed public registry.
Currently, the status of the state’s STR bill remains in limbo as we enter the
informal session.
Regardless of the state’s present inability to pass a
bill dealing with the taxation, regulation, and insuring of STRs, most
municipalities have enacted ordinances to
limit STRs in some fashion. For example, the City of Boston’s Ordinance
Allowing Short-Term Residential Rentals defines a STR as the rental of a
residential unit for a period fewer than 28 consecutive calendar days, limits
the definition of an operator to a “natural person who is the owner of the
Residential Unit” (a tenant cannot engage
in the short term rental of their apartment), and requires the operator to
certify that offering their dwelling for STR does not violate applicable
condominium documents, bylaws, or other governing documents. Owners are also
required to (this is not a complete list of requirements): register their
units; ensure compliance with building, sanitary, zoning, fire code(s), as well
as any other requirements, laws, or regulations; provide notice to abutters of
their residential unit being registered as a STR; pay an annual registration
fee (varies by type of STR); and retain records for three (3) years, evidencing
the number of month’s the operator has resided or will reside in the unit, as
well as the number of days the unit was offered as a STR. In Cambridge, STRs
are defined as the rental of a residential unit for a period up to thirty (30)
days but, contrastingly to Boston, allows a tenant/leaseholder to offer their
units for STR. Registration is required, as well as compliance with building
sanitary, zoning, fire code(s), as well as any other requirements, laws, or
regulations – and constituent documents (if applicable). In Lynnfield,
following a murder at a mansion that was rented on a short term basis for a
large party, the town passed an ordinance prohibiting STRs altogether.
As practitioners and counselors, we need to be aware of
local ordinances (and updates in the state’s efforts) when advising our clients
about the risks and rewards of STRs. While change is certainly in the
air…landlords and HOAs should carefully consider allowing, prohibiting, and/or
monitoring “airbnbs”.
Ted Papadopoulos is a partner at Ashton Law, P.C and focuses his
practice in the representation of management companies and property owners in
various landlord-tenant, as well as general real estate related matters. Ted
can be contacted by email at esp@ashton-law.com.
