Before you open up your property for guests, you should be aware of the state and local regulations, tax requirements, and insurance issues.
Where you live is a big factor in what restrictions apply to using your property as a short-term rental. If your property is within the municipal boundaries of Bolivar, Harpers Ferry, Charles Town, Ranson, or Shepherdstown, you’ll need to check current zoning regulations specific to those municipalities. Local restrictions may also change over time. For example, Jefferson County is in the process of updating its zoning regulations (see adjacent article). Additionally, if your property is in a homeowners association, you should review HOA covenants and restrictions. Likewise, you should check whether restrictive covenants on your property deed limit the use of the property as a short-term rental.
in West Virginia, individuals operating short-term rentals must also obtain a business registration certificate from the state. Both Airbnb and Vrbo are required to collect and remit state and local sales taxes on behalf of the hosts on their services and, starting in January 2022, hotel occupancy tax should be handled the same way. However, if you market or direct-book a property yourself, you must manage the tax remittances directly. You’ll also need to familiarize yourself with how you identify these taxes when you advertise the property. Consider consulting with an accountant to determine how operating expenses, improvement costs, and depreciation should be reported with your personal tax return.
Using your property as a short-term rental will also change your insurance needs, so be sure to discuss your plans with your insurance agent. Airbnb and Vrbo provide some liability and property protection through their host agreements, but these coverage are not technically insurance — and they don’t provide coverage for any direct-book guests. If you are renting a property that is not your primary residence, you may be subject to Health Department approval as a lodging facility — and need a commercial insurance policy.
BY: Brenda Waugh
Brenda Waugh, MA JD, is a lawyer/ mediator with Waugh Law & Mediation, serving clients in the Blue Ridge region of Virginia and the Eastern Panhandle of West Virginia. Email: firstname.lastname@example.org.By Brenda Waugh