Short Term Rentals 101
An Apartment/Housing Community that leases its units to an occupant for a period of less than thirty (30) days is a "Short Term Rental" within Florida. For purposes of the ordinance , a typical lease term will be less than thirty (30) days in duration. Typical users of a Short Term Rental are vacationers and travelers who are in need of a place to stay while on vacation or on business in the area. Florida has seen an increasing demand for these Short Term Rentals due to more people traveling to the State as a result of our beautiful beaches, good weather and overall lower cost to visit Florida.
Florida’s Legal Framework
A variety of legal requirements apply to short term rental agreements in Florida. Short term rental agreements are rental agreements with an occupancy of less than six months, and the shorter the occupancy period, the more laws apply.
Licensing Requirements
Many local jurisdictions require short term rentals to obtain a business license from the municipality where the rental property is located. Homeowners Associations may also require that short term rental properties within their jurisdiction be registered. For example, Miami-Dade County requires residential rentals in unincorporated areas with an occupancy of six or fewer months to be registered with the County’s Department of Regulatory and Economic Resources. Similarly, since May 2018, there has been a uniform registration requirement for short term rentals in Miami Beach. Florida statutes, Florida Administrative Code regulations, and other local ordinances also impose specific licensing requirements on motor courts, motels, hotels, apartment motels, rental condos, time-share condominiums, houseboat rentals and transient private home rentals.
Occupancy Taxes
Short term rental properties in Florida must collect the "tourist" or "bed" tax from their guests, and remit the payment of the tax to the State. The State taxes 6% of the rents received for short term occupancy. Numerous local jurisdictions, such as Miami-Dade County, collect an additional one percent (1%) in a Local Option Tourist Development Tax. Some municipalities also have a Business Tax Receipt which is akin to the local tourist tax and applies similarly to short term rentals.
Other Potential Fees
Some local jurisdictions impose fees on short term rentals that are not classified as "tourist" or "bed" taxes. Miami-Dade County, for example, imposes a $50.00 annual registration fee on all short term rentals in unincorporated portions of the County.
Requirements for Landlord/Tenant Relationship
Tenants residing in short term rental properties may be entitled to certain regulatory protections similar to those enjoyed by long-term tenants (i.e. renters and roommates). For instance, some Florida cases have applied the terms of the Residential Landlord and Tenant Act to short-term rental situations. Additionally, Florida law allows individuals living in rooming houses (although few short term rentals are classified as rooming houses) to claim specific rights normally associated with tenant rights.
Right to Make Improvements and Make Rent Determination
Some states also allow short term rental parties to agree in writing "the duration and conditions of the use of the short term rental unit and the monetary compensation to be paid in exchange for its use." In Florida, parties to a short-term rental unit may set the rates and conditions on which the unit can be rented so long as the agreement is explicitly made, created, and signed by both parties.
Summary
A number of legal issues potentially arise when a short term rental is offered in Florida. Legal advice is essential.
Must-Have Clauses for a Rental Agreement
Payment Terms:
This section will stipulate the amount of rent to be paid and the due date. You should also specify acceptable forms of payment, and penalties for late payment.
Deposit Policies:
Most landlords will require some sort of security deposit against damages or missed rent payments. Be sure to set out conditions for both the full and partial return of any deposits, and what items will be considered adequate replacements for damaged items.
Termination Conditions:
Most rental agreements will have a specific termination period, usually between 10 and 30 days. After this time, the tenant will vacate the premises. Be sure to include provisions for early termination, such as a penalty fee or forfeiture of rent already paid.
Damage Policies:
This clause provides for payment of any damages done to the rental property. If it seems necessary, you may want to have a requirement for photographs of the property upon taking possession. When the tenant voluntarily vacates, they should re-take the photos to show the state of the property.
Late Payment Charges:
If your rental agreement provides for a penalty upon late payment, the amount should be clearly stated. Just be aware that in some states, this may violate consumer protection laws, so be sure to check the statutes in your state before doing so.
Occupancy Restrictions:
If there are restrictions on the use of the property, such as for commercial purposes only, be sure to make this clear. Most landlords will also limit the use of the property to two occupants for every bedroom.
Landlord and Tenant Obligations
The responsibilities and obligations of both the landlord and the tenant are guided by Florida law. Under statutes, the landlord is responsible for maintaining the rental proper condition, including all appliances, plumbing, lighting, heating, hot water, elevators, and, in some cases, grounds, elevators, and parking facilities. The burden falls on the tenant to maintain the premises in a clean and safe manner.
It is essential for landlords to keep the premises in good and habitable condition, and to promptly respond to tenant maintenance requests. Landlords should stay on top of their obligations in order to avoid liability under Florida law.
Landlords may be held liable for injuries to third parties, including guests of the tenants, if the injuries could have been avoided by regular maintenance. If the landlord fails to act in a timely manner, the tenant may terminate the rental agreement, seek remedies including monetary damages, and be awarded attorney’s fees.
Florida obligates the landlord to provide a written notice of a failure to make necessary repairs. This can include a doorbell and key/security card.
Paid repairs can be deducted from future rent payments. Further, with §83.56(5), Florida law permits a tenant to make necessary repairs and deduct them from the rent as long as:
Common Legal Mistakes to Avoid
The world of short term rentals is rife with legal complexities. Most landlords and tenants make the mistake of believing that short term rentals work pretty much like a traditional lease. They do not, and many legal "pitfalls" await both culpable and innocent parties. Consider the following points to avoid most of these issues, which I discuss further below.
There is no relationship among your short term rental tenants and long term tenants. There is a relationship among your short term renters, but any claim related to such relationship is one only they can bring as a tenant against their landlord, as a defendant. Even an abatable nuisance – loud parties or 3 AM loud music – is one that does not give "standing" to a long term tenant to complain.
A short term rental can be easily terminated for failure to follow any of the express terms of the short term tenancy. You have a breach of contract indemnity claim against your short term renter if this occurs.
Short term tenants are not entitled to the process of eviction. They are subject to being asked to leave without any notice at all. All such tenants are "at will" tenants, and thus, no eviction or notice is needed, although we recommend some form of notice to "cure" the breach of contract first if you are going to terminate the short term tenancy when there are no other issues.
You can terminate your short term rental with or without cause. Again, the short term tenancy is "at will," and you owe no notice or cause to terminate the arrangement. Those are contractual requirements only , but the lessor/lessor should consider written notice in all cases to prevent a "foreign" landlord or tenant from filing a $10 Compliance Officer complaint against your business.
A short term rental landlord could be liable for any damage caused by a subrental by the short term tenant. Short term tenants can sublease their rented premises for short term tenancies themselves, as well. Make this permission conditional upon the express understanding that liability for any breach of the sublease rests with the party renting the sublease, not the landlord. This will encourage your short term renters to decide from the outset to rent fully the risk of accepting a sublety, something we believe is unwise and foolish.
Make sure each short term tenancy is a separate agreement from each other, and that none is guaranteed by any other short term tenancy. Without this, if you find yourself ever having to litigate a dispute with a foreign land lord or tenant, that party may be an "agent" of the other(s) short term land lord or tenant, which may create a two-front war for you. A "head landlord" or "head tenant" can sign up to many different "subleases," but no "sublease" can sign up to many different "head leases."
As is made clear by the problems you can cause for your business in attempting to ameliorate these common pitfalls, short term rentals are not as simple as they may appear. There are many ways to avoid these and other pitfalls, especially with the help of an experienced real estate attorney.
How to Handle Rental Disputes
When entering into a short term rental agreement, the hope is to avoid any disputes with your landlord or tenant. However, it is good to be familiar with the processes available for resolving disputes in Florida.
The Florida Residential Landlord and Tenant Act governs the relationship between landlords and tenants, providing a comprehensive framework for the rental process. Section 83.51 of the Florida Statutes sets forth the landlord’s obligation to maintain the premises and remedies available for failure to do so. Section 83.52 sets forth the tenant’s obligations, describing the remedies available to the landlord for a breach of the lease. These sections of the Statutes also address the procedures for both landlords and tenants to repair defects and seek damages if these responsibilities are not met.
Should you experience any issues with your landlord or tenant, you may be able to resolve the issue via mediation or through the court system. Mediation is generally the better option as it is a quicker and more cost effective solution to any short term rental disputes. It will also help keep a business friendly relationship. There are various private organizations that provide mediation services throughout Florida.
The mediation process involves the assistance of a qualified, neutral third party (mediator) to facilitate discussion and help both parties reach a voluntary agreement. Engaging in mediation allows both parties to voice their concerns, share information, and suggest potential solutions. As a general rule of thumb, you should try to mediate the dispute where applicable and save litigation as a last resort. However, if mediation does not succeed or one of the parties is not receptive to the process, litigation may be necessary.
If you cannot reach an agreement with your landlord or tenant through mediation, you may be able to request a neutral party to issue a binding order, which could be enforced by the court if either party fails to comply. The court system is also available to assist in resolving the dispute once mediation has been unsuccessful. In most cases, the Florida Statutes provide a process for obtaining a remedy through the court system if mediation is unsuccessful.
From small claims court to large dispute resolution proceedings, the remedies available under the Florida Residential Landlord and Tenant Act provide a structured framework for resolving such disputes. If you are experiencing an issue with a short term rental agreement, consult a knowledgeable attorney in the state of Florida to ensure that you understand your rights and responsibilities as well as the best course of action to take in the dispute.
The Role of Local Laws
Like anything worth doing, short term rentals in Florida involve much more than a casual arrangement between a homeowner and a vacationing individual. In addition to running afoul of federal law like the Fair Housing Act and state statutes related to discrimination and landlord-tenant relationships, anyone who is interested in leasing a home or portion of a home on a short term basis will also have to deal with numerous local ordinances.
Because short term agreements are often priced out of the range of ordinary people looking for long term real estate, in some places, an increase in short term rentals has been linked to concerns that "neighborhoods are being transformed into a series of commercial enterprises." This has led some municipalities to restrict short term rental agreements to apply only to primary residents in single family residential zones, Cocoa Beach and Orlando’s proposed ordinances being popular examples. Other municipalities, such as Davie , adopted twin-track policies which permit short term rentals for both parts of single-family homes and entire homes so long as the property owner applies for and complies with the municipality’s regulations.
There are also various local ordinances that have come into effect in recent years making specific requirements for short term rentals including provisions for safety and maintenance inspections of rental properties by either the local municipality, an independent contractor or the county health department. Some municipalities also do not allow short term rental agreements unless a property owner is a member of a trade organization, such as the Vacation Rental Managers Association, which was founded in 1985 and now has members in 26 states.
Years ago, in 1991, the Federal Trade Commission heralded the value of short term rental agreements in a report titled "Ready-to-Rent" in which the authors envisioned a "new, more open world where real estate is not just owned but shared when it is not in use." The future is here, but as we have learned in the last thirty years with issues spanning the social, medical and technological spheres, there are always consequences to consider.