The NC Vacation Rental Act aims to facilitate the tourism industry by providing a legal framework for operating and regulating rental properties. Whether you are a rental property owner or a vacationer, it is vital to understand the provisions and implications of this act. In doing so, property owners can avoid legal liability, and vacationers can be familiar with their rights.
What Is the NC Vacation Rental Act?
North Carolina, renowned for its picturesque landscapes, stunning coastlines, and vibrant cities, is a popular vacation destination for travelers from all walks of life. While some choose to stay in hotels, others prefer to rent short-term vacation homes through apps like Airbnb and VRBO. Vacation homes offer a cozier atmosphere and have a broader reach in terms of location.
However, the emergence and rapid growth of short-term rentals have led to increased regulatory laws. North Carolina Airbnb laws are a prime example.
The NC Vacation Rental Act (VRA), found under Chapter 42A of the North Carolina General Statutes, was established to regulate short-term vacation rentals, including homes, condominiums, and other dwelling units. The VRA applies to short-term rentals, characterized by rental periods of less than 90 days. While the NC VRA was enacted in 1999, its provisions remain relevant today.
The VRA protects vacationers from injury, financial loss, and fraud by detailing the legal responsibilities of landlords and rental agents. In addition, the VRA also outlines the responsibilities of tenants to preserve the rights and interests of property owners.
Upon signing a vacation rental agreement, the landlord and tenant agree to adhere to its terms. By law, landlords must make the property habitable and safe.
Do You Need a License to Do Airbnb in North Carolina?
North Carolina laws currently do not require landlords to register or carry a license to rent out their properties on Airbnb. However, NC Airbnb laws may vary depending on the city or county. Some local governments may require owners to obtain a business license or secure zoning permits.
Key Provisions of the North Carolina Vacation Rental Act
Understanding North Carolina vacation rental laws can come as a challenge if you don’t know where to begin. While it is best to familiarize yourself with the VRA with the help of an attorney, there are some major provisions worth diving into.
Here are the key provisions under the NC Vacation Rental Act.
1. Rental Agreements and Disclosures
A fundamental aspect of the VRA is the requirement to enter an NC vacation rental agreement. This agreement should be in written form and clearly outline the rental terms.
At a minimum, the agreement must consist of the following:
The rental price, security deposit, and other possible fees;- The rights and obligations of the tenant, and,
- Rights and obligations of the real estate agent/broker and/or landlord.
The rental price, security deposit, and other possible fees;If there are any potential inconveniences or conditions that may impact the tenant’s stay, the landlord must disclose them. For example, if ongoing construction is nearby, the landlord must inform the tenant as it may cause a disturbance. Disclosure of such conditions allows tenants to choose their accommodations wisely.
2. Security Deposits
The VRA permits landlords to collect security deposits from renters. Security deposits are refundable after the stay, though they may cover any damages caused by vacationers. The VRA also provides guidelines on the amount of security deposit and the procedures for its return following the end of the tenancy.
3. Inspections and Repairs
Property owners or landlords have an obligation to maintain the rental property and keep it habitable. The VRA permits property owners to conduct inspections to assess the property’s condition and address any necessary repairs. Furthermore, the Act outlines the landlord’s responsibility to provide working smoke detectors and carbon monoxide alarms.
4. Tenant Obligations
Property owners or landlords are not the only ones with obligations. Vacationers also have a responsibility to keep the rental property clean and safe. Tenants must not deliberately damage or destroy any part of the property. If they do, they must shoulder the cost of repairs and maintenance unless the damage resulted from ordinary wear and tear.
5. Real Estate Broker Obligations
Apart from the landlord and tenant, the real estate broker or agent also has certain obligations. These include managing the property according to the agreement, complying with all applicable laws, and notifying the landlord of necessary repairs. The broker or agent must also ensure the property has operable smoke detectors and carbon monoxide alarms.
Implications of the NC Vacation Rental Act
What are the implications of the NC VRA? In general, the VRA protects consumer interests, clarifies legal rights and obligations, and promotes economic growth in the state.
1. Consumer Protection
The NC Vacation Rental Act enhances consumer protection by ensuring that vacationers receive transparent information about their rights and the rental property. This promotes a fair and ethical rental market.
2. Legal Clarity
The VRA offers legal clarity for both property owners and vacationers as it defines the rights and responsibilities of each party. This helps minimize potential disputes and legal issues. This limits lawsuits and helps contribute to a more harmonious rental experience.
3. Economic Growth
The VRA serves to regulate the rental market fairly, transparently, and consistently. A well-regulated market tends to attract more tourists, thereby contributing to the economic growth of the state. Clearly defined regulations encourage owners to rent their homes, leading to more tourism-related revenue.
Benefits of the NC Vacation Rental Act
Both rental property owners and vacationers stand to gain from the VRA. Here are the benefits of the NC Vacation Rental Act.
For Rental Property Owners
The VRA provides a structured and legal framework for managing rental properties. It eliminates ambiguity and ensures that rental agreements contain clear terms. This, in turn, reduces the likelihood of misunderstandings and disputes arising from misinterpretations. Property owners can also attract more tenants by complying with the Act.
For Vacationers
The VRA promotes consumer protection by providing a clear outline of the rights and responsibilities of tenants. This assures a certain quality and safety for vacation rentals and their tenants.
NC Short Term Rental Laws for HOAs
The NC Vacation Rental Act has more to do with tenant rights and landlord obligations. It does not dictate whether short-term rentals are permitted in homeowners associations.
In early 2023, North Carolina introduced a bill that would prevent local governments from prohibiting short-term rentals. However, the bill ultimately did not pass. That being said, the Legislature can reintroduce the bill in the future. The bill only affects local governments, though, and not HOA communities.
In general, HOAs still have the authority to restrict short-term rentals in North Carolina. Such a restrictions should appear in the association’s governing documents.
Frequently Asked Questions
What is the North Carolina short term rental law?
The North Carolina Vacation Rental Act protects tenants who rent a property for less than 90 days.
Do short-term rental laws require a rental agreement?
Yes, the NC Vacation Rental Act does require a written vacation rental agreement. This agreement should include a clear and visible notice to the tenant that the Vacation Rental Act covers the rental, that the landlord or the landlord’s agent may disburse a part of the rent prior to the occupancy, and that the landlord may evict the tenant using an expedited process.
Additionally, the agreement must dictate how the landlord will handle the tenant’s funds, outline any processing fees, and state what the tenant can do if the landlord cannot provide a fit and habitable property or a comparable substitute. It should also include information about the expedited eviction procedure, the rights of both the tenant and the landlord if there is a mandatory evacuation or if the property is sold, and any other obligations.
What happens if a vacation rental is canceled due to a natural disaster?
If a vacation rental is canceled or cut short due to a natural disaster, the landlord or broker may offer the tenant insurance on their rental. This insurance will cover the cost of missed nights because of a mandatory evacuation.
In the event of an evacuation, if the landlord does not offer insurance, they must refund the money to the tenant for all missed nights. However, if the tenant was offered rental insurance prior to the start of the vacation and did not take it, then the landlord is not required to refund the money in the event of a mandatory evacuation. This insurance, though, must cover the risk of a mandatory evacuation and cost no more than 8% of the rental price.
Following the lifting of the mandatory evacuation order, the landlord and broker must refund the tenant’s money if they can’t provide the property in a habitable and safe condition or provide a comparable property in the same condition.
Is there a North Carolina short term rental ban?
There is no NC short term rental ban that applies to all rentals statewide. North Carolina currently does not prohibit short term rentals. That being said, city and county governments may have restrictions concerning short term rentals. For instance, the city of Raleigh requires STR operators to secure a zoning permit. A similar law exists in Asheville.
To Landlords in HOAs
The NC Vacation Rental Act is a crucial piece of legislation. It plays a pivotal role in regulating the vacation rental market in the state. Although established in 1999, its provisions remain relevant and applicable today. Homeowners in HOAs who wish to rent out their homes must abide by the VRA, too.
Cedar Management Group provides expert management services to HOAs and condominiums, including help with rental restrictions and enforcement. Call us today at (877) 252-3327 or contact us online to learn more!
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