The short-term rental industry is a flourishing business in Rhode Island, specifically in coastal resorts like Newport and Narragansett. Indeed, as of the end of 2021, Airbnb had announced that their hosts in Rhode Island have earned $210 million since 2010. However, with the industry’s growth, it was inevitable that the short-term rental market would become more regulated. As an owner of a short-term rental property in Newport – The Treehouse B&B – I want to tell you about recent shifts in the regulation of Rhode Island short-term rentals and the impact they have on both property owners and property renters.

Shifts in Rhode Island Short-Term Rentals Regulations

“Short-term rentals have become a thriving industry. In places like our districts in Newport, investors have been buying up housing to rent in this way, and the state is not tracking where these businesses are operating. It’s impossible to ensure safety or compliance with laws when we don’t even know where the rentals are. Rhode Island needs to keep up with the evolving rental industry and adopt a statewide registry,” described Rhode Island State Senator Dawn Euer.

Reacting to this, the Rhode Island Department of Business Regulation (“DBR”) passed a state law last year mandating that property owners who present their homes as Rhode Island short-term rentals must register with the DBR before listing their property. The aim of the short-term rental registry is to make the process easier and safer for renters.

The law enacted by the General Assembly codified amendments to Rhode Island General Laws §42-63.1-14. As a result of this legislation, any short-term rental property listed for rent that’s listed on any third-party hosting platform website that does business in Rhode Island is now obligated to register with the DBR.

Property owners must pay a $50 fee and include specified data about their property upon registering. The application also requests registrants to list the intended use of the space and other pertinent information renters should know about the property.

Guaranteeing short-term rental owners are complying with tax and safety regulations and that the owner’s contact information will be accessible for emergencies is the logic driving this legislation. This idea isn’t new, as many towns and cities including Newport, Narragansett, and Portsmouth already require short-term rental owners to disclose this information at the municipal level.

The DBR expects that eventually there will be thousands of short-term rentals registered in Rhode Island. Short-term rentals must be registered by January 1, 2023 which is when it will become mandatory. Homeowners whose properties aren’t contained in the database but are listed online could be fined up to $1,000. According to DBR Interim Director Elizabeth Dwyer, “If we find people out of compliance, there would be a full administrative process.”

Concurrent with the new rule mandating vacation rental operators to register with the DBR, Rhode Island hosts must also register with the Rhode Island Division of Taxation, collect lodging taxes from their guests, file regular lodging tax returns, and pay the taxes.

If a host utilizes a short-term rental marketplace such as Airbnb or Vrbo, that collects all guest payments, the marketplace is required to register with the Rhode Island Division of Taxation, charge and collect taxes, and pay the tax on behalf of the host. Any short-term rental host that directly collects payments from guests are accountable for their own lodging tax compliance.

Once registered, each short-term rental will be given an identifying number to be displayed on third-party hosting websites, such as Airbnb or Vrbo, so potential renters can be assured that the property has been vetted. Then renters can explore the database for individual properties to authenticate their registration status and learn more about them before booking.

The information will be stored in an online database created by DBR. Any short-term rental property that neglects to register will be fined $250 for the first 30 days of noncompliance, $500 for 60 days of noncompliance, and $1,000 for more than 60 days of noncompliance.

A variety of information regarding Rhode Island short-term rentals will be available to renters including:

  • The principal place of business of the owner, or if outside the state, the agent for service of process or property manager for the owner
  • The phone number of the owner of the property and/or property manager
  • The email address of the property owner and/or property manager
  • The address of the rental property
  • The number of rooms for rent at the property
  • Whether the registrant rents or owns
  • Intended property use (entire space, private room or shared space).

Additionally, if a short-term rental marketplace lists an unregistered rental property they can be fined. Moving forward, the DBR may promulgate additional rules on registration, including required fees. There no loopholes that property owners or short-term rental marketplaces can take advantage of to keep renting out their homes on a short-term basis.

To Wrap Up

The January 1, 2023 registration deadline is quickly approaching. If you still haven’t registered your Rhode Island short-term rental property here’s a link to the DBR page that will walk you through the process.

I’m Kyle Costa with Bay Shores Real Estate, and as a Rhode Island short-term rental property owner myself you can rely on me to answer all of your questions about the entire registration process

And, if you want to own a Rhode Island short-term rental property, I can help you find your ideal property. Let’s connect and get your journey to owning a short-rental property Rhode Island under way!