Need a little extra dough and considering cleaning up that extra room in the back and renting it out? Want to rent out your house while you’re in California next week?
Stop and check the laws before you list that cool, Red Rock-themed room for rent for the weekend. If you’re not in the cities of Las Vegas or North Las Vegas, odds are, you’re about to break the law.
While Airbnb has given the power to the people — it’s a platform for people to list their spaces for short-term rental to strangers — it also leaves all the legal risk for the people.
Unincorporated Clark County, and most of Henderson has put the kibosh on short-term rentals (less than 30 days) in residential areas. And the city of Las Vegas has strict legal codes — including requiring hosts to obtain a business license, paying an annual fee of $500 for each rental unit, and mandating a letter from the host’s homeowners association, if applicable, stating permission to have a short-term rental.
North Las Vegans — for once — you’re in luck.
“The city of North Las Vegas does not have a short-term rental ordinance,” Greg Blackburn, the city’s public information officer said. “We have not experienced problems with these rentals so we have not taken any steps to require business licenses. Accordingly, we do not charge any fees and do not have any restrictions on rental periods.”
Yes, you — like hundreds of others near the Strip (that’s the unincorporated county, not the city) — could chance it and list your space for rent anyway. What harm will to do?
Well, Dan Kulin, public information officer for Clark County, says: jail time.
“It’s a misdemeanor criminal charge for the zoning violation. You could face jail time and a $1,000 fine.”
Airbnb doesn’t police hosts, and reminds them to be thorough in researching laws, regulations and tax ordinances before listing their spaces for rent. Their guide to legal issues includes a city-by-city breakdown, but be wary: it lists Las Vegas as one entity. And the city proper is a very limited part of Clark County. If you’re not sure in which jurisdiction your house lies, the county points residents to an online map.
Most zone violators are caught the old fashioned way — nosey or upset neighbors.
Although Airbnb doesn’t suggest anyone break local law, the company does believe in being neighborly. In its guide to new hosts, it suggests informing neighbors about your intent to rent out your home and discussing any issues they have with the concept before there are problems.
The company also created a neighbor hotline to discuss concerns or find out more about their program at 888-927-4459.
Why do it?
Aside from the obvious (money!) many hosts do it for the interaction with people from around the world.
“I have always loved to work with people and feel very comfortable around strangers; a person is only a stranger until you meet them,” said Elisa Soler Zaldivar, a Canadian who, with her partner Nadia Regalado, rents out her Las Vegas home.
“Our love for diversity, ethnicity and culture are the main reasons we decided to open an Airbnb at home.”
And Las Vegas is a hotspot of international travel. In March alone, 3.7 million people visited the Las Vegas-metro area and filled 149,262 rooms. And 19 percent of all visitors in 2015 were international, according to the Las Vegas Convention and Visitors Authority. And 68 percent of visitors also said they use the internet to assist with planning their Las Vegas trip, which is key to Airbnb hosts.
“We have beautiful stories with a few young couple visiting us from different states, especially California. They were caring, respectful and appreciative. They left us a beautiful note and flowers, some other couples left a bottle of wine and a beautiful note; and for us that is more rewarding than anything else.”
Airbnb all but mandates that its hosts have homeowners or renters insurance. The company urges hosts to protect themselves, their property and their renters with property and liability insurance.
Liability insurance could be key. If a renter is injured on your property, they can sue. Liability insurance (typically through homeowners or renters policies) protects you in those instances by paying out up to the policy maximum for injuries on your property.
Because Airbnb is simply the middle man, it doesn’t require much from the hosts or the renters, it simply offers its guarantees to ease the worry.
The $1 million Host Guarantee is a protection plan for hosts in the event that any property was destroyed by a renter.
Hosts are encouraged to work out the issue directly with the renter, but in the event that they incur damages, the host is instructed to file a police report and file a claim before the next renter comes in.
“Most of (our renters) have been incredibly good, caring and respectful to our home. We are very new at this — just started in February — and so far we are trying to have faith and trust the good will and people’s word,” Zaldivar said.
The money you make from renting out your spare space can be both a help and a headache. Don’t forget that Uncle Sam wants to know about all your income — not just what comes in on a W2.
And some areas are wising up to the loss in hotel taxes and charging Airbnb hosts taxes on their rentals as if they were hotels.
The best advice in this arena is to find a taxman, iron out the nitty gritty details of the tax code and pay up quarterly so you’re not hit with a huge bill in April.
As far as the legal issues are concerned, make sure the zoning allows short-term rentals, protect yourself and your property and then figure out the tax laws for your area. It can be complicated for setup, but once you’re rolling, the details become more fun.
“For us, it is not a job is a passion. It is very important in this time to help each other and we love this concept of sharing economy and helping local people grow and develop in whatever they do.
It is like going back to my grandparents’ time when everyone helped each other and that was the most important and the right thing to do,” Zaldivar said.
“Our best advice for anyone would be, don’t do it for the money, do it because you love it.”