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Understanding the Legal Landscape of Short-Term Rentals in Towson

By: Gary Damico

Short-term rentals (STRs) are forever increasing in popularity among homeowners and travelers. Platforms like Airbnb and VRBO offer an appealing mix of affordability and local experience, drawing a diverse user base. However, the growth of STRs brings regulatory challenges. This article offers a comprehensive overview of the current legal landscape for short-term rentals in Towson, Maryland, with a focus on Baltimore County regulations.

Definition and Scope of Short-Term Rentals

In Baltimore County, a short-term rental refers to a unit or room in a single-family home or condominium that is available for rent for less than 30 consecutive days. These rentals are usually listed on platforms like Airbnb and VRBO. The county has specific regulations to ensure these rentals comply with legal requirements and maintain community standards.

Registration and Licensing Requirements

Initial Registration. Before listing a property as a short-term rental, it’s essential to register and license it with Baltimore County. The registration process entails submitting an application and paying a registration fee of $60 per unit. This step is crucial for ensuring all short-term rentals are properly documented and monitored by the county.

Inspection Requirements. Properties with six or fewer dwelling units must undergo a comprehensive inspection by a state-licensed home inspector. The inspection covers various safety and habitability standards, including the functionality of plumbing systems, the operational status of windows, the proper venting of combustion appliances, and the presence of smoke detectors and carbon monoxide alarms. Additionally, properties built before 1978 require a lead inspection certificate to address potential health hazards from lead-based paint.

Exemptions and Self-Certification. For properties with seven or more units, Baltimore County offers a self-certification process if the property has fewer than three public health, safety, or welfare violations over the past three years. This process allows for more streamlined registration, provided the property maintains a good compliance record.

Renewal Process. The rental license for short-term rentals is valid for three years. Before the license expires, property owners must renew it, which includes a re-inspection and submission of updated documentation to ensure continued compliance with county regulations. This periodic renewal process helps maintain the quality and safety of rental properties.

Community Impact and Enforcement

Community Concerns. The rapid increase in short-term rentals has brought up several community concerns, including noise, parking issues, and changes to a neighborhood’s character. To address these issues, Baltimore County is actively enforcing its STR regulations. This enforcement includes regular inspections and penalties for non-compliance, ensuring that rental properties adhere to community standards and do not negatively impact the local environment.

Community Benefits. On the other hand, short-term rentals offer significant benefits to our community. They attract tourists who prefer staying in homes rather than hotels, providing a more personal and comfortable stay at often lower costs. This influx of tourists results in increased spending at local businesses, such as restaurants, shops, and entertainment venues, thus boosting the local economy. Furthermore, the operation of STRs generates employment opportunities in property management, cleaning services, maintenance, and hospitality, providing stable jobs essential for the smooth running of these properties. For property owners, STRs offer a lucrative way to supplement their income, helping to cover mortgage payments, property taxes, and maintenance costs.

Legislative Updates. Recent legislative efforts have focused on strengthening the rental housing registration and inspection processes to improve housing quality across Baltimore County. County Executive Johnny Olszewski has announced new legislation aimed at modernizing the rental registration process and enhancing the county’s ability to ensure that all property owners fulfill their obligations to tenants and the community. These updates reflect a commitment to balancing the benefits of short-term rentals with the need to protect community standards and ensure safe, quality housing.

Compliance and Ethics Checklist

Entering the short-term rental market in Baltimore County can be a lucrative venture, but it requires careful adherence to local regulations and ethical practices. Below is a checklist outlining key steps and considerations for prospective short-term rental landlords to stay compliant and uphold community standards.

Legal and Regulatory Compliance

1. Registration and Licensing:
   • Register your property with Baltimore County as a short-term rental.
   • Obtain and renew the necessary rental license every three years.
2. Inspections:
   • Schedule and pass an inspection by a state-licensed home inspector.
   • Ensure the property meets safety standards, including functional plumbing, operational windows, and proper venting of appliances.
3. Tax Obligations:
   • Register for tax collection with local authorities.
   • Collect and remit occupancy taxes from guests, typically around 9.5%.
   • File regular tax returns detailing rental income and taxes collected.
4. Zoning Compliance:
   • Ensure your property complies with local zoning regulations.
5. Insurance:
   • Obtain short-term rental liability insurance with a minimum coverage of $1 million.

Ethical Considerations and Best Practices

1. Transparency and Communication:
   • Clearly communicate house rules and property details to guests.
   • Provide accurate descriptions and photos in your listings.
2. Neighbor Relations:
   • Inform neighbors about your rental and provide contact information for any issues.
   • Address any complaints from neighbors promptly and respectfully.
3. Guest Safety:
   • Equip the property with safety features such as smoke detectors, carbon monoxide alarms, and fire extinguishers.
   • Maintain the property to be hazard-free and well-kept.
4. Community Impact:
   • Be mindful of the impact on the local housing market and avoid practices that reduce long-term rental availability.
   • Support local businesses and adhere to community standards.
5. Fair Pricing:
   • Set fair and competitive prices for your rental, considering market rates and local regulations.
6. Non-Discrimination:
   • Ensure your rental practices comply with all non-discrimination laws.
   • Provide equal access and accommodation to all potential guests.

As the trend of short-term rentals continues, Baltimore County will persistently fine-tune its rules to tackle new obstacles and prospects. Future rules might impose more limitations on the number of rentals in specific neighborhoods, add safety and accessibility provisions, and amplify enforcement tools for compliance. The primary hurdle for decision-makers will be to strike a balance between the economic advantages of short-term rentals and the rights and quality of life of locals. Continuous community involvement and feedback will be crucial in forming equitable and efficient policies.

The short-term rental market in Towson, Maryland is not only a key part of the housing sector but is also growing quickly. Baltimore County’s regulations help ensure that these rentals operate safely and responsibly, benefiting both property owners and the broader community. By understanding and adhering to these regulations, property owners can contribute to a thriving and sustainable rental market while maintaining the unique charm of Towson’s neighborhoods. If you need assistance on any of your commercial real estate needs, Gary Damico and the experienced attorneys at WCS can provide knowledgeable representation. Contact the WCS Real Estate Practice Group to learn more.