New “Good Cause” Short Term Rental Clause
There was a recent scandal reported in the news of a Denver couple being arrested for attempting to bypass the short-term rental laws Denver recently enacted. Shortly before this arrest, another man named Garth Yettick had his short-term rental license revoked. This is significant as it is the first time an incident like this has happened in Denver’s history.
Yettick’s license was revoked for the same reason the Denver couple was arrested: his rental property, which he had been renting out through portals such as the extremely popular Airbnb, was not his primary residence, despite the fact he had told the city of Denver otherwise.
Although he was not arrested for his offense, his infractions triggered a domino effect that eventually led to the city re-writing the short-term rental laws. These new laws, which went into effect in early April 2019, now state that a license can be revoked over “good cause”.
The Vague New Amendment
The “Good Cause” amendment states that a license may be revoked if there is:
“Evidence that a Short-Term Rental or a property for which a Short-Term Rental license is being sought has previously been, or will be, operated in a manner that adversely affects the public health, safety, or welfare of the immediate neighborhood in which the property is located.”
If you are thinking that this sounds vague, it’s because it is. The Department of Excise and Licenses made this rule vague intentionally in order to create a blanket cover for mishaps like Yettick’s.
You see it was not necessarily the fact that Yettick’s Airbnb listing was not his primary residence that made him lose his license. It was his inattention to detail that got his license annulled. The people renting out his Airbnb were bad tenants. According to CPR News, “Neighbors complained because of rowdy parties, disruptive guests, and traffic [at the listing]”. It was after this fact that anybody found out that his “Marion Manor” listing was not registered as his primary residence.
There are lessons to be learned from Yettick’s mistakes:
- Follow the law
- Treat your short-term rentals like your long-term rentals, and…
- Be selective about who you allow to rent your spaces.
Although the renters are “short-term”, the effects of their actions may not be. These people are still your guests in the city. The way they interact with your neighbors reflects on you. If, for example, they are parked illegally on the street, it might as well be your own car that is in violation of the law.
Review your Guests when possible
Home rental sites such as Airbnb have guest reviews from previous renters, and it is important that you use this feature to your advantage. Just as these renters’ vet your listing, you need to vet the renter right back.
You can find reviews left by other hosts by clicking on the potential renter’s profile image, then selecting the link that says “Reviews” at the top of the page.
For your comparison, I have included samples of guest reviews. Who would you allow to stay in your home?
“Although she was a quick stay, it was our pleasure hosting [her]. She respected our house rules, communication ran smoothly, and most importantly, she was super friendly! I recommend her as a guest and would gladly host her again.”
“You told me you were coming to NY for a conference, not college kids looking for a fraternity house. I entered the apartment AFTER check out time to find a complete mess, with all the air conditioners running and the apartment door open, a burned coffee pot and the smell of smoke. Even my exterminator smelled it. I agree, you’re better suited for a hotel experience.”
We are Here for You!
If you have any questions about the new short-term rental laws, or would like to discuss this further, please reach out to me. Rental properties – both short-term and long-term – are a very important part of Denver’s economy. At the New Era Group (at Your Castle Real Estate), agents are heavily trained to handle both. Reach out to me and we can tackle the ups and downs of the industry together.
Buyers – Should I Move?
If we’re not headed for a bubble any time soon what does this mean for you as a buyer? It means you should consider buying a home if (and only if!) it makes sense for you to do so. Are you running out of room at home? Expecting a baby? Have an awful commute? Want to live in a nicer neighborhood? Looking for a better school district for the kids? There are a lot of great reasons to move, but don’t buy a home to speculate on the market; buy because it’s time for a new home. Here are some recent stats for the Denver Market:
Please feel free to call me anytime to discuss what your options are and how I can help you find a wonderful place to live!