Desktop Reference Guide: Vacation Home Rentals
In more recent years, the number of vacation home rentals has been growing in Minnesota. Due to the increased number, the 2008 legislature created a Vacation Home Rental Taskforce led by Explore Minnesota. Their primary focus was to ensure that vacation home rentals operating as a business are a safe lodging alternative that are managed and regulated on a level playing field with other lodging options, such as resorts and bed and breakfasts. One characteristic of vacation home rental that further distinguishes it from most other types of lodging is that there is not an onsite manager. An additional focus of the taskforce was the need to develop a workable means of mixing commercial and residential uses (zoning) among properties on the same lake or within the same area or building.
It is interpreted by some that current Minnesota regulations already apply to vacation home rentals, however the language of the regulations doesn't specifically refer to "vacation home rentals." Since the market is not identified, there are several legal and regulatory concerns as well as issues that arise when operating a commercial business alongside neighboring residences, including:
- Payment of federal, state and local taxes
- Licensing by the Department of Health
- Building code requirements
- Septic, plumbing and water quality compliance
- Fire safety
- Capacity issues
- Zoning compliance (commercial or residential)
- Identifying and posting contact information on management
- Insurance requirements
- Overcrowding/maximum occupancy
- 24 hour contact availability with local manager for guests and neighbors
- Business signage
- Parking capacity/RV parking
- Driving responsibly
- Responsible use of recreational equipment
- Outside camping
- Malicious complaints
- Licensing process
As mentioned, it is interpreted by some that current regulations already apply to this type of activity. According to the Minnesota Department of Health, Minnesota Statutes Chapter 157 and Minnesota Rule Chapter 4625 (though it does not specifically define "vacation home rental") would apply to a facility offering sleeping accommodations to the public. Within Department of Revenue oversight, vacation home rental is not specifically defined, but is believed to be included under the more general intent of the occasional sales statute. Property tax and individual income tax statutes would also apply.
Real Estate licensees, who provide property rental and management services as licensed under chapter 82, are allowed to operate vacation home rental management businesses without an additional Department of Health license. The vacation home rental unit or units themselves may require additional licensing, which may be provided by the unit owner or rental management company or broker.