Short-term rental laws are alive and well in Gaithersburg, MD. Each host must submit a license application to operate their short-term rental and agree to set operational standards. According to the City,
“The ordinances were carefully considered to balance both the desires of the property owner to generate income through such rentals and the integrity and safety of our neighborhoods.”
At this time, hosts are not permitted to allow events at their short-term rental which could include small weddings, family reunions, and other gatherings outside the normal scope of short-term rental lodging (eating and sleeping).
Short-Term Rental Laws in Gaithersburg – License Application Requirements
When submitting the license application, hosts agree to the following requirements and operational standards for their short-term rental business:
- Provide a copy of short-term rental liability insurance of no less than $1,000,000 naming the City of Gaithersburg as an additional insured, throughout the duration of the license.
- Provide a letter of approval of short-term rental from Homeowner’s Association or Condominium Association indicating the common ownership fees are no more than 30 days past due.
- Ensure that the licensed dwelling unit has a working smoke detector in every bedroom and on every level of the home and working carbon monoxide alarms have been installed on every level of the home.
- Ensure that the following information is posted in a conspicuous location in the dwelling unit: emergency contact information, property address, responsible parties contact information, floor plan showing emergency/escape routes, and City of Gaithersburg Neighborhood Services contact information.
- Agree to remit all local taxes and required fees.
How Insurance Fits Into Short-Term Rental Laws
With the explosive growth of short-term rental properties found on websites such as Airbnb or Vrbo, communities are struggling to find common ground laws. Many communities have already passed ordinances and laws with which all have some type of insurance requirement.
Gaithersburg’s short-term rental laws include such an insurance requirement, including listing the City as additional insured. It’s common for entities to be added as “additionally insured” on liability insurance policies, and it’s through this addition that the interested entity is afforded liability coverage.
Without this “additional insured” requirement for coverage, it’s unlikely the City has any protection in the event a plaintiff names them as a defendant in relation to bodily injury or property arising out of short-term rentals in the City.
The Benefit of Short-Term Rental Laws for Hosts & Cities
A commercial general liability insurance requirement is good for owners and good for the City. It creates a barrier to entry that eliminates non-professionals and it comes with stricter insurance carrier underwriting requirements, which may include property inspections, smoke alarms in all bedrooms, fire extinguishers, chimney cleanings, type of wiring, railings on all stairways, and a general higher level for the standard of care.
Other hospitality entities including Bed & Breakfasts and Hotels carry commercial general liability. Short-term rentals should be no different.
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