Legislative Update – December 6, 2018
Baltimore City is the latest Maryland jurisdiction to pass legislation establishing a comprehensive framework to regulate short-term rental (STR) hosts and platforms.
“We applaud lead sponsors Council President Jack Young and Councilman Eric Costello, and the entire Baltimore City Council for passing this important legislation,” said Amy Rohrer, President and CEO of the Maryland Hotel Lodging Association. “We believe this legislation strikes the right balance between preserving home-sharing for Baltimore guests and residents and protecting Baltimore’s hospitality industry from those investors who skirt the law and use short term rental platforms to operate illegal hotels throughout the city. The legislation preserves the fabric of Baltimore’s neighborhoods, protects guests and our communities, and ensures that hosts and platforms pay their fair share.”
Baltimore City Bill 18-0189 will establish the following:
- A host may list only their primary residence. This ensures that real estate speculators or “illegal hotel” operators will not exploit STR platforms.
- One unit may be grandfathered in by an individual meeting certain criteria and owning / operating a short-term rental prior to December 31, 2018.
- Each host must have a license from the City, and pay $200 to renew it bi-annually. The licensing framework includes processes to suspend or revoke licenses and/or issue fines up to $500 for violations by hosts.
- Hosts must follow basic rules in order to operate. They must be in compliance with city building, fire and related codes, keep record of all rentals, and designate / post an emergency contact in the unit. They must be registered with the State Comptroller for collection of state sales tax and display their license number in listings advertising the rental.
- Platforms may not collect fees for rooms booked on behalf of unlicensed hosts and may be subject to fines of $1,000 for violations of this provision.
- Platforms must collect and remit applicable hotel taxes and keep records, available to the Housing Commissioner upon request, including a complete listing of all properties listed on the platform and the total number of nights / fees charged each time the unit was rented.
It is worth noting this legislation has very strong platform accountability language that should withstand potential legal challenges by the platforms that have arisen in other jurisdictions.
Pending signature by the Mayor, collection and remittance of the hotel tax is scheduled to take effect December 31, 2018, with all other licensing requirements taking effect December 31, 2019.