While rental at short notice and for small periods of time was once thought not to be cost-effective, evidently, websites and the sharing economy has proven that it can be.
The success of seasonal term rentals means you may be looking to cash-in on the trend as a landlord. It is necessary to know the rules and regulations to ensure that everything is done legally.
What is Seasonal Term Rental?
Seasonal term rental or short-term rental is a tenancy that lasts for a short length of time. This means it will not be a permanent arrangement; it is only renting out a home for a short period that maybe during the busy months of the year. It is arguably safer and less hassle to offer seasonal term rental on your home compared to long-term rental. Seasonal term rental properties will be fully furnished. This means that it should have all of the essential items you need for everyday living. This includes bed linen, furniture and basic items. The internet is making it easier to broadcast your home, with your location and condition of the property some of the main things that people look for.
Landlord Responsibilities for Short Term Renting
Some of the rules and regulations that apply to full-term renting will still apply when it comes to seasonal term renting. This means carrying out vital safety checks before anyone moves into the home. This is a legal responsibility as a landlord, whether you are part-time or fulltime. You will have to obtain a gas safety certificate and complete a fire risk assessment. This should be done every year to make sure the property is safe for seasonal renters. Every property is required to have a smoke detector and carbon monoxide alarm. This is included in the Smoke and Carbon Monoxide Alarm (England) Regulations 2015.
There are now regulations in place since May 2015 that state that it is mandatory for landlords in the UK to have a planning permit if they plan to rent out their property for more than 90 days per year. This can be obtained from your local council. Otherwise, property rented for less than 90 days is known as temporary sleeping accommodation as defined by Deregulation Act 2015. The explanatory notes of the Act define temporary sleeping accommodation as:
occupied by the same person for less than ninety consecutive nights and which is provided for a consideration arising either by way of trade for money or money’s worth, or by reason of the employment of the occupant, whether or not the relationship of landlord and tenant is thereby created.
If you do not obtain a planning permit, you may be subject to a substantial fine and have to cease your landlord activities.
The Deregulation Act 2015 also states that as a landlord, you are responsible and under a legal obligation to pay the council tax for the property. This is in contrast to long-term renting where tenants are expected to pay council tax and other fees such as television licences.
Prior contractual agreements may affect your ability to short term rent. For example, there can be restrictions in leases and subletting. It is best to check over the contract you have signed if the property does not belong and is owned by you. If you have a landlord and they agree to allow seasonal renting, there may be no problem. If you have a mortgage, it is best to check with your lender before going ahead with short term renting. There can sometimes be restrictions on subletting, such as with the Help to Buy Scheme.
Seasonal Term Rental in Other Countries
Other countries around the world allow seasonal term rentals and the regulations vary. For example, you can avoid having to apply for a rental licence in Spain by running a seasonal let instead of a private holiday home rental. This means that it is not a permanent abode and allows landlords to avoid the rules set out in Spain’s Tenancy Act. There is no time limit in days or years like there is in the UK. You do not need to register the property as a rental and you are not subject to any property inspections. The only downside in Spain is that you are not able to rely on third party platforms; you must find your own clients to enjoy seasonal term rentals.
Across the USA, each state has varying rules on short term rental. For example, in Los Angeles, homeowners are only permitted to rent out their primary residence and this can only be for short stays with a maximum of 120 days a year. You are also required to register and pay hotel taxes. Another strict example is New York City. The New York State Multiple Dwelling Law actually made it illegal to rent out an apartment for less than 30 days. This is only allowed if the owner is also living there at the time.
References:
Deregulation Act 2015
Smoke and Carbon Monoxide Alarm (England) Regulations 2015
Spain’s Tenancy Act
The New York State Multiple Dwelling Law