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May 6, 2026
Vacation rentals are different from single family homes in many ways, most notably during the selling process. Many sellers are unaware of the unique layer of compliance involved in the sale of vacation rentals until it is too late and interferes with closing or actually stops closing from occurring.
Here's what you need to know before listing.
Almost all short-term rental licenses are issued in the name of the property owner or owners, typically identified by name or legal business entity. This means the license is not transferable to the new property owner should the property change ownership.
You should also check with your local municipality or city licensing office to see if there are any local restrictions.
Many reconsidered closing risks come from unrestrained Satellite Telecommunications Radio (STR) violations that were not addressed during the closing process. These inactive issues can be violations that can be discovered in title searches and cause seller liability disputes.
Make sure all problems are addressed before selling. These issues will be uncovered by potential buyers during due diligence.
When you purchase a vacation rental property you will want to make sure that the seller has paid out all outstanding occupancy taxes. These are called transient lodging taxes and are regulated by each individual state. According to the American Hotel & Lodging Association, each state has its own rules and regulations, some are more precise than others.
Selling a short-term rental isn't quite like selling any other property. Agents need to know more than the basics of real estate law - they need a solid grasp of the STR rules and regulations specific to that location. In popular tourist markets especially, having an agent who understands local compliance requirements can make all the difference in getting the sale across the line smoothly.
Before selling a rental property, a property management company will consider several criteria when reviewing the transaction by evaluating whether the property is in compliance with local and state regulations, whether or not there are current bookings, and whether there is an upcoming licensing renewal.
If you're looking to buy a property in a vacation hotspot or a city with a thriving short-term rental scene, you'll want an agent who really knows the local rules. Understanding the regulations around short-term rentals can make or break an investment - something the National Association of Realtors has long acknowledged.
When selling a vacation rental property, in addition to the regular steps involved in selling a home, you will need to take several specific steps to bring your buyer and property into full compliance with local, state and federal laws. Ensure that all licenses are up to date, resolve any violations and confirm the tax exempt status of the property before listing the property. Working with local professionals who are knowledgeable of the governing laws and the process to bring a property into full compliance can actually save you time in the long run. Instead of losing valuable time waiting for your buyer to resolve issues of noncompliance after an offer has been accepted, you can complete the sale process more quickly and efficiently.
