By Kim Lewicki, Highlands Newspaper
It’s not clear if a new act moving through the NC legislature is the Short-term Rental legislation Highlands Town Board has been waiting on before making changes to or expanding its STR regulations.
The litigation between the town and Save Highlands has been stayed, as well, while both sides wait to hear if new legislation will help either of their cases.
So far, from the looks of it, SB 290 – introduced March 9 by NC Senator Vickie Sawyer, who represents Iredale and Yadkin counties, which was sent on to the Rules and Operation of Senate committee on March 13, is the only STR-related legislation in the pipeline.
Also, from the looks of it, it doesn’t address the town’s amendments to the Unified Development Ordinance regarding STRs – specifically that homeowners can’t rent homes as STRs unless in existence as such prior to Sept. 15, 2022, nor does it address amortization of STRs – which the Town Board wants to invoke to rid Highlands of STRs forever more.
Instead, according to the act’s summary, the purpose of the act is to simply improve the safe rental of certain properties by requiring compliance with local ordinances and codes and by establishing a maximum occupancy limitation.
The verbiage in the act makes it clear that all parties are subject to making sure “safe rental” is a reality – the owner of the property, the tenant, and the governing body.
The Vacation Rental Act – 42A – stands as the foundation of the new act.
In the bill summary SB 290 amends GS 160D-1207 (pertaining to periodic inspections under minimum housing codes) to clarify that nothing in that law will be deemed to prevent a local government from enforcing ordinances related to maximum occupancy, as that term is defined in the Vacation Rental Act (GS 42A-4) [VRA], for a vacation rental property that is subject to the provisions of the VRA.
The new act also adds maximum occupancy as a definition in the VRA, defined as the maximum number of persons allowed in a vacation rental, measure as an amount not exceeding four persons per bedroom. This is a departure from what has been allowed, which was two per bedroom.
It also amends GS 42A-31 (pertaining to the landlord’s obligation to provide fit premises for a vacation rental) to require the landlord to (1) comply with all current applicable local ordinances and codes; and (2) accurately represent the number of bedrooms and bathrooms on the property and prohibit the rental of the property to a tenant if the maximum occupancy of four per bedroom will be exceeded. It also sets forth specifications on how to determine number of bedrooms and bathrooms on the property using tax records.
It also makes conforming changes to GS 42A-32 (tenant’s obligation to maintain dwelling unit under the VRA) and GS 42A-33 (responsibilities and liability of real estate broker under the VRA).
The act reiterates that in no event may a local government do any of the following: (i) adopt or enforce any ordinance that would require any owner or manager of rental property to obtain any permit or permission under Article 11 or Article 12 of this Chapter from the local government to lease or rent residential real property or to register rental property with the local government.
According to Town Planner Michael Mathis, the town doesn’t require Special Use Permits for STRs accept for Tourist Homes, which has always been a requirement.
According to SB290, the only time a local government can require an owner to obtain a permit or permission to operate a STR is for properties that have more than four verified violations in a rolling 12-month, or two or more verified violations in a rolling 30-day period, or upon the property being identified within the top ten percent (10%) of properties with crime or disorder problems as set forth in a local ordinance.
A local government may require periodic inspections as part of a targeted effort to respond to blighted or potentially blighted conditions within a geographic area that has been designated by the governing board.
However, the total aggregate of targeted areas in the local government jurisdiction at any one time shall not be greater than 1 square mile or five percent (5%) of the area within the local government jurisdiction, whichever is greater.
Basically, the owner of the property must make sure it is habitable and safe; the tenant must not do anything destructible to the property and must adhere to local garbage, noise and parking ordinances; and the rental agency must be on point concerning the property.
“It sounds like this would define maximum occupancy and how to specifically determine it. Also, it clarifies what the owner’s, tenant’s and the real estate broker’s responsibilities are,” said Town Manager Josh Ward.
The act has just started moving through the legislative process.
“Our attorneys will monitor the proposed STR legislation. As for SB 290, that is a proposed bill that could be amended as it goes through the legislative process in this long session,” said Mayor Pat Taylor.