The Clay Township Board of Trustees has recently adopted a short-term rental ordinance to regulate vacation rental properties.  On Aug. 2nd, the ordinance was passed with a 6-0 vote and the new ordinance is now in place.  During the meeting on Aug. 2nd, there were several residents that stepped forward with complaints about short-term rentals in their neighborhoods causing disturbances. 

General Short-Term Rental Regulations 

All vacation rentals shall meet the following standards: 

  1. All vacation rentals shall be registered with the Township. The short-term rental of an unregistered dwelling unit as a vacation rental is prohibited. The registration shall be accompanied by a registration fee established by resolution of the Township Board.
  2. The term of registration shall be 2 years from the date of issuance by the Township. Registration renewal shall be required for all registered vacation rentals in accordance with this Ordinance prior to expiration of the registration term. Any change to property ownership during the term of registration shall require a new registration in accordance with this Ordinance.
  3. A vacation rental shall not be registered without proof of a valid occupancy permit by the property owner and Zoning Complaint Permit issued by the Building Department.
  4. In order to register a dwelling unit for use as a vacation rental, the property owner or owner’s local agent shall provide and certify as true on a form provided by the township:
    1. Name, address, and telephone number of the property owner. Any change to property ownership during the term of registration shall require a new registration in accordance with this ordinance.
    2. A statement certifying that the property owner shall consent to inspections by the Township and will, upon reasonable notice being provided, make the dwelling unit available to inspectors upon request of a mutually agreed day and time. A copy of this registration form shall be provided to the Clay Township Police Department to assist with any 911 or non-emergency rental complaints.
    3. Proof of homeowner’s insurance and personal liability insurance for renter occupants.
      • *These are just a few of the items required to register a dwelling unit as a vacation rental, continue here for the full list of items.
  5. Existing vacation rentals in operation at the time of adoption of this Ordinance shall have a period of 6 months in which to complete registration. Existing vacation rentals that are not registered within the time specified shall be considered in violation of this ordinance.
  6. The maximum term of any individual rental period shall be 180 days.
  7. The maximum advertised number of occupants shall not exceed the bedroom capacity defined in Section 3, 2., plus two per finished floor. A single-family dwelling unit containing a vacation rental shall not exceed 4 bedrooms within the dwelling unit in total.
  8. Each vacation rental shall post, in a clearly visible location near the primary building entrance, the following notice and copies or summaries of all local ordinances referenced within items i-iii

Personal Liability vs. Commercial General Liability  

Personal liability is found in all homeowner’s insurance policies and protects against claims of bodily injury or property damage they could be found personally liable. It specifically excludes any coverage for bodily injury or property damage arising from “business activity”. Most insurance policies define a business as something that results in more than $2500 of financial compensation during the 12-month policy period. If a short-term rental produces more than $2500 compensation, then personal liability would not respond to any short-term rental claims.   

Commercial General Liability is found in business insurance policies and protects the insured against claims of bodily injury or property damage they could be found legally liable. It doesn’t exclude “business activity” and extends beyond the premise, i.e., dog bite off-premise. Unless excluded, it also provides personal and advertising injury. It’s the most comprehensive liability insurance one can purchase.  

The difference between these types of liability insurance is astronomical and should be closely considered by hosts looking to enter the short-term rental scene as well as municipalities enforcing insurance requirements.  Other hospitality entities including bed and breakfasts and hotels carry commercial general liability. Short-term rental properties should be no different. 

Quote Your Short-Term Rental Today  

Interested in a policy to protect you and your business from liability and damage claims? Proper Insurance leads the Nation in short-term rental insurance, with over 50,000 policies written in all 50 states. Backed by Lloyd’s of London and exclusive endorsements from short-term rental leaders such as HomeAway and Vrbo, Proper Insurance is built on world-class insurance coverage that meets and exceeds both city and lender requirements. 

Quote Your Short-Term Vacation Rental Today