Vacation Rental Act Inoculates Against Ordinances Passed by Cities and Counties

Oct 2019
Vacation Rental Act Inoculates Against Ordinances Passed by Cities and Counties

Short-term and vacation rentals have been a contentious topic in many communities across North Carolina. Asheville City Council has gone as far as enacting a prohibition on short term rentals in the City limits for the foreseeable future (read more here . Raleigh and other municipalities across the state are considering similar measures (see Forrerst Firm article by John Burns). Now the North Carolina General Assembly has thrown a wrench in cities’ abilities to regulate and impose limits on vacation rentals.

The Vacation Rental Act (VRA) passed during the last session applies the provisions of NCGS 160A-424 and NCGS 153A-364 to vacation rentals. Under these statutes, the state explicitly limits the ability of cities and counties to “adopt or enforce any ordinance that would require any owner or manager of rental property to obtain any permit or permission from the city to lease or rent residential real property or to register rental property with the city” unless there are more than four violations of a hazardous or unlawful condition. Nor can cities require a special fee or tax on residential rental property that it does not also require of commercial properties.

For example, currently, Asheville requires both a permit and a fee for short-term vacation rentals.  Asheville’s Code of Ordinances states that “[w]henever a process is prescribed… and said process contains requirements in addition to those prescribed by state law, the process prescribed in this chapter shall be deemed supplemental; state law controls.” Asheville, N.C., Mun. Code § 7-2-4(a) (2019), link

Does this mean anyone with a residential property can use Airbnb, VRBO, or Craigslist to rent out property as short-term or vacation rental without applying for and receiving a permit? As the VRA is still relatively new, it remains to be seen what challenges it will present to municipalities and property owners alike.

If you have an issue involving short-term or vacation rentals, contact Allen Stahl + Kilbourne to discuss your options.


By Derek Allen and Ed Flowers

Updated: October 1, 2020