New Rules for Short-Term Rentals

Effective February 1, 2015, Administrative Code Chapter 41A (known as the Residential Unit Conversion Ordinance) was amended to allow tenants and owners who are permanent residents to rent all or a portion of their unit for tourist or transient use under certain conditions. This short-term residential rental use is only allowed if the hosting tenant or owner complies with all the requirements of Chapter 41A. The Planning Department, not the Rent Board, enforces and administers the requirements of Chapter 41A, which can be found on the Planning Department's website at: - q01

The new law does not override any provision in a tenant’s lease that prohibits use of the unit for short-term rental. Chapter 41A specifically “does not confer a right to lease, sublease, or otherwise offer a residential unit for short-term residential use where such use is not otherwise allowed by law, a homeowners association agreement or requirements, any applicable covenant, condition, and restriction, a rental agreement, or any other restriction, requirement, or enforceable agreement.” Thus, even if a tenant complies with the requirements of Chapter 41A and receives a valid Short-Term Residential Rental Registration from the Planning Department, the new law does not affect a landlord’s ability to evict a tenant under Rent Ordinance Section 37.9(a)(2) for violation of a lease covenant that restricts or prohibits short-term rentals.

If a landlord unilaterally imposes a new lease provision that prohibits short-term rentals after the inception of the tenancy, the landlord may not evict a tenant under Rent Ordinance Section 37.9(a)(2) for violating the new lease covenant unless the change in terms of tenancy was accepted in writing by the tenant after receipt of written notice from the landlord that the tenant need not accept such new term as part of the rental agreement. (See Rent Board Rules and Regulations Section 12.20.)

Even where there is no restriction on short-term rental use in the lease, the tenant must still comply with Chapter 41A in order to rent the unit for short-term residential use. However, Rent Ordinance Section 37.9(a)(4) was amended as of February 1, 2015 to provide that a first-time violation of Chapter 41A by a tenant is not considered an "illegal purpose" for which the tenant can be evicted if the tenant cured the violation within 30 days of written notice. 

For short-term rentals in rent-controlled units, the hosting tenant may not charge rental fees to guests that are more than the monthly rent the tenant is paying to the landlord. Pursuant to Chapter 41A.5(g)(1)(G), the hosting tenant must comply with the initial rent limitation for subtenants found in Rent Ordinance Section 37.3(c). Failure by a hosting tenant to comply with Section 37.3(c) for short-term rentals of less than 30 days is a violation of Chapter 41A, which is not enforceable at the Rent Board. For longer rentals, a subtenant can file a petition at the Rent Board for a refund of rent overpayments if the master tenant has violated the initial rent limitation set forth in Section 37.3(c).