Boston Short-Term Rentals: Who Can Register a Unit

Short-term rental income shows up in a lot of Boston listing conversations, and the rules behind it are narrower than they sound. The program is run by Inspectional Services, and it turns on who lives in the building.

What counts as a short-term rental

The city defines it as the use of a residential unit for residential occupancy, for a period of fewer than 28 consecutive calendar days, for a fee. Stays of 28 consecutive days or longer are not short-term rentals. Units under contract with a health-care facility, government entity or nonprofit for hospital stays are excluded, as are furnished institutional or business stays with a minimum stay of at least 10 days under a contract with a corporate housing operator.

Which buildings qualify

Units offered as short-term rentals are only allowed in owner-occupied condominiums, single-family, two-family and three-family buildings. In a two or three family, the owner-occupant must own all the units. A registered unit may be offered up to 365 days per year.

The three unit types and their fees

A limited share unit is a private bedroom in the owner-operator’s primary residence, with one bedroom reserved for the operator’s use and the owner present during the rental. The fee is $25 per year and occupancy is limited to three guest bedrooms or six guests, whichever is fewer. A home share unit is the whole unit at the owner-operator’s primary residence, at $200 per year, with occupancy limited to five bedrooms or 10 guests, whichever is fewer. An owner-adjacent unit is the entire single secondary unit inside an owner-occupied two or three family, also $200 per year. Lodging houses and bed and breakfasts register with the same registry but pay no registration fee.

The primary residence test

To be considered a primary residence, an owner needs to live in the property for at least nine months out of a 12-month period. On request you have to show either that you lived there for nine of the past 12 months or that you plan to live there for nine of the next 12. Proof comes from at least two of: a residential exemption record, a utility bill showing service and mailing addresses, a voter registration certificate, a motor vehicle registration, the deed, or a driver’s license or state identification.

What makes a unit ineligible

A unit cannot be below market rate or income restricted, subject to affordability covenants, or subject to rental assistance under local, state or federal law. It cannot carry three or more violations within a six-month period, counted from January 1, 2019, of the short-term rental ordinance, excessive noise, improper trash disposal, or disorderly conduct, including state Sanitary, Building and Fire Code violations, and it cannot have outstanding violations of those kinds. It cannot sit in a Problem Property or in a property owned by a Problem Property owner. It has to be classified as residential use, which excludes hotels, motels and executive suites, and it cannot be part of a congregate living complex, elderly housing, a group residence, a homeless shelter, an orphanage, a temporary dwelling structure or transitional housing. A unit is also out if any other law prevents leasing, subleasing or short-term rental use, which is where condominium documents and some leases come in.

Host responsibilities

The active registration number issued by Inspectional Services goes on any listing. A business certificate from the City Clerk’s office follows review and payment. The license renews each year. A sign inside the unit has to show the location of fire extinguishers, fire exits and pull fire alarms. Only one whole unit may be offered at a time, so a host with both a home share and an owner-adjacent unit cannot rent both while away. Abutters have to be notified within 30 days of the license issuing, and an abutter is any residential dwelling within 300 feet of the unit. The application also requires contact information for a local person who can respond to issues in person within two hours of being notified.

The line that matters at a closing

Licenses do not transfer with the sale of the unit. That sentence is doing a lot of work in any deal priced off short-term rental income, because the buyer starts over with a new application, a new eligibility check and a primary residence they have to actually establish. If a property in a two or three family also holds long-term rental units and the owner wants an owner-adjacent license, the property has to be current in the city’s long-term Rental Registry as well.

Before you write an offer

Run the address through the city’s eligibility tool and the registered property list before you price the income in. Looking at a two or three family in Greater Boston and trying to work out what it can legally do? Send me the address and I’ll check its registration and eligibility with you. Diana Kim, REALTOR®, eXp Realty.