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Vermont Short-Term Rental Regulations: What Property Owners Should Know

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Close up view of a sign outside the Vermont Department of TaxesVermont’s short-term rental regulations impact any property owner who wishes to make their property available for residential rental purposes for fewer than thirty (30) consecutive days and for more than fourteen (14) calendar days per year. This can include both entire units and single rooms within a unit if the rental is for a stay of less than thirty (30) consecutive days. Both state and local ordinances govern short-term rentals in Vermont. Navigating these rules requires careful attention to detail and proactive compliance to avoid potential legal pitfalls.
 

Who Enforces Short-Term Rental Regulations in Vermont?

  • State Oversight:
  • Local Oversight:
    • Short-term rental regulations differ significantly across Vermont’s towns and cities.
    • Municipalities like Burlington, Stowe, and Killington have specific zoning restrictions, registration requirements, occupancy limits, and tax obligations.
    • This local variability necessitates careful research into the specific ordinances governing the rental property’s location to ensure the use is allowed.

What Are the Legal Considerations for Short-Term Rental Operators in Vermont?

  • Licensing and Registration: Compliance with state and local licensing and registration requirements is essential. If a property is rented for a total of fifteen or more days in one calendar year, the owner must remit Vermont Meals and Rooms Tax to the Vermont Department of Taxes and, in most instances, obtain a Vermont Meals and Rooms Tax Account. If a person operates three or more units as short-term rentals on the same property, or if the operator intends to serve food at a short-term rental, then a Vermont Department of Health Lodging License is required, and meals served are subject to a separate tax.
  • Fire and Life Safety Regulations: Compliance with all Vermont fire and life safety codes and regulations is paramount to ensure the well-being of guests. Rented properties must be inspected by the Division of Fire Safety for compliance with Residential Rental Housing Health and Safety Code. Failure to comply with the code can result in the imposition of fines and liability for any resulting injury or damages. Of particular note, 20 V.S.A. § 2734(d), provides that “violation of any rule adopted under this subchapter shall be prima facie evidence of negligence in any civil action for damage or injury that is the result of the violation.” Common violations include non-complaint egress windows in bedrooms, lack of interconnected, hardwired, photoelectric smoke and carbon dioxide alarms, non-complaint handrails along stairways, improperly installed or cleaned dryer vents and missing or malfunctioning fire extinguishers.
  • Advertising: Operators of short-term rentals who advertise on any online platform are required to post their Vermont Meals and Rooms Tax account numbers on all advertisements. If, however, the short-term rental operator advertises on an online platform that has an agreement with the Department of Taxes to collect and remit tax on behalf of its operators, such as Airbnb.com, then the operator may post the Vermont Meals and Rooms Tax account number used by that platform on its advertisement. When using the platform’s tax account number, there is no need to obtain a separate Vermont Meals and Rooms Tax account.
  • Zoning and Land Use: Understanding local zoning ordinances is vital to ensure legal operation. Some municipalities restrict short-term rentals to owner-occupied properties or impose additional restrictions. Advertising must be limited to the number of approved bedrooms consistent with the State of Vermont Wastewater and Potable Water Supply Permit. If a property qualifies for the “Clean Slate” Exemption (Section 1-303 of the Vermont Wastewater and Potable Water Supply Rules) and does not have a Wastewater and Potable Water Supply Permit, occupancy should be limited to the number of bedrooms in the property as of January 1, 2007. Municipal assessment records may provide evidence of the number of bedrooms at that time.
  • Tax Compliance: Accurate and timely tax remittance is crucial to avoid penalties. This includes, but is not limited to, the obligation to collect and remit Vermont Meals and Rooms Tax to the Vermont Department of Taxes. Municipalities may impose additional taxes; for example, the City of Burlington collects a 9% gross receipts tax on revenue earned from short term rental activity.
  • Liability and Insurance: Adequate insurance coverage is necessary to protect against potential liability. Depending on the nature of the property, it may be prudent to transfer ownership to a limited liability company (LLC) or another entity that affords a liability shield.

Why Should Vermont Short-Term Rental Owners Hire an Attorney?

  • The complexity of Vermont short-term rental regulations can be overwhelming.
  • Failure to comply with these regulations can result in significant fines and penalties and may require a property owner to defend against legal action brought by municipal or state regulatory authorities or by an injured party.

MSK Attorneys provides comprehensive legal guidance to short-term rental operators, including:

  • Assistance with licensing and registration.
  • Representation in disputes and enforcement actions.
  • Compliance with applicable local ordinances.

Contact MSK Attorneys online or call us at 1-802-861-7000 for a consultation to discuss your specific needs and ensure your peace of mind.
 
Disclaimer: This information is for general guidance only and does not constitute legal advice. It is essential to consult with a qualified attorney for advice tailored to your specific situation.