With the rise of vacation rentals, the City of Southport Board of Alderman approved a new ordinance on July 1st, regulating Homestays and short-term rentals after months of debating among residents.  Southport has estimated that there are more than 100 homes acting as vacation rentals and neighbors are concerned about rowdy groups renting these homes in residential areas.  Southport is one of the many cities to re-evaluate their short-term rental regulations due to the increase in popularity of these rentals.

New Short-Term Vacation Rental and Homestay Regulations 

Homestay

Where permitted, the following shall apply:

  1. Is a full-time resident of the property. 
  2. No activities other than lodging shall be provided.  Special events, including weddings, receptions, and other large gatherings, are expressly prohibited. 
  3. The homestay owner or operator shall maintain a minimum of $500,000 general liability insurance on the property, which covers the homestay use and homestay guests. 
  4. The homestay owner or operator must pay applicable taxes, including occupancy and sales taxes, to the appropriate governmental entities. 
  5. The homestay owner or operator shall not prepare food for guests or provide pre-packaged or unpacked food items or beverages for guests. 
  6.  The homestay area of the dwelling shall comply with all current and applicable building codes. 

Short-Term Vacation Rentals

Where permitted, the following shall apply:

  1. No activities other than lodging shall be provided.  Special events, including weddings, receptions, and other large gatherings, are expressly prohibited. 
  2. The length of stay of guests shall be less than 30 days. 
  3. The short-term vacation rental owner or operator shall maintain a minimum of $1,000,000 of general liability insurance on the property, covering short-term vacation rental usage and guests. 
  4. The short-term vacation rental owner or operator must pay any applicable taxes, including occupancy and sales taxes, to appropriate governmental entities. 
  5. The short-term vacation rental shall comply with all current and applicable building codes. 
  6. A short-term vacation rental zoning permit is required pursuant to 2.6 (I).  It shall be a violation of the City’s Unified Development Ordinance to operate a short-term vacation rental without having secured a valid short-term vacation rental zoning permit. 

Above are the new regulations of higher importance but here you can find the full list of new regulations.

Short-Term Rental Laws – Insurance Requirements  

The primary reason for an insurance requirement is to ensure that short-term rental owners are properly protected from injuries or property damage. 

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 is the most comprehensive liability insurance one can purchase for short-term rentals.   

Additionally, when defining the “proof” of insurance, cities or counties can easily require a “certificate of insurance” which is a standardized form to show proof of insurance to various interested parties, including banks, mortgage lenders, or in this case, cities or counties requiring owners to provide proof of insurance to obtain a short-term rental certificate. 

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