Recently I did some research on who needs a license to manage short term rentals, who needs a license to manage long term rentals, who needs a license to manage associations, and which statutes apply when and I thought I would share my findings. I am not an attorney so if you want or need legal advice you should consult an attorney.
I manage vacation rentals, long term rentals, and associations in Panama City Beach. My company has a corporate Real Estate Brokers license and I have a Real Estate Broker’s license. My company also has a Community Association Managers Firm license and I have a Community Association Managers license. In addition, my company has a Collective Resort Management License for scattered vacation rentals and several Group Resort Management Licenses for vacation rentals. Sometimes, I feel like I am license poor as I also have a Certified Building Contractors License and not too long ago I was spraying Round Up on some grass and someone stopped by to tell me I needed a license to do that – so now I also have a Limited Lawn and Ornamental Pest Control License too.
Real Estate Managers like myself run into several chapters of the Florida Statutes from time to time including:
Chapter 83, Part II, Residential Tenancies
Chapter 509, Part I, Public Lodging
Chapter 468, Part VIII, Community Association Management
Chapter 475, Part I, Real Estate Brokers
The main thing that decides which statute applies to a rental seems to be if the rental meets the definition of transient occupancy.
Chapter 83, Part II
There are no licenses required under Chapter 83. Chapter 83 is known as the Florida Residential Landlord and Tenant Act and it applies to the rental of dwelling units. Transient occupancy in a hotel, condominium, motel, rooming house, mobile home park, or similar public lodging, is excluded from Chapter 83. Chapter 83 defines “transient occupancy” as occupancy when it is the intention of the parties that the occupancy will be temporary.
Chapter 83 clearly applies to most long-term rentals if the rental unit will be the sole residence of the tenant and the rental is not temporary. The deciding factor seems to be what was the intention of the parties for the occupancy and whether the intention was temporary.
Most vacation rentals should meet the definition of transient occupancy. If a Guest comes down for the July 4th week, it is clearly transient. If a Northern Guest comes down and rents for 60 or 90 days and this is not their sole residence, then I think they are transient. Also, if a couple decides to rent for 30 days while they look for a permanent house to buy or rent, this seems to be transient. However, if someone comes in and rents for a few months and does not appear to have any other home or place to go when the term is up, they are probably not transient and their rental is probably subject to Chapter 83.
If Chapter 83 applies then there are specific sections that apply to how a security deposit is handled and how a landlord can evict a tenant.
Chapter 468, Part VIII
Chapter 468 regulates Managers of homeowner and condominium associations in Florida. A company and an individual manager must be licensed if they are responsible for the management of more than 10 units or if the association being managed has an annual budget of more than $100,000. You must have a license if for remuneration, you control or disburse funds of an association, prepare budgets or other financial documents for an association, assist in the noticing or conduct of association meetings, coordinate maintenance for the association, and other day-to-day services involved with the operation of an association.
Chapter 475, Part I
Chapter 475 regulates Real Estate Brokers and Sales Associates in Florida. A company that acts as a Broker must register and get a license and any individual acting as a Broker, Broker Associate, or Sales Associate must also register and get a license. You must have a license if you for compensation, rent or lease real property of another or offer or hold out to the public that you are engaged in the business of renting or leasing, or procure owners, tenants, or lessees for these activities.
There are a few exemptions to Chapter 475 including “Any person, partnership, corporation, or other legal entity which, for another and for compensation or other valuable consideration, rents or advertises for rent, for transient occupancy, any public lodging establishment licensed under Chapter 509.”
If you are managing or renting for an Owner a vacation rental for transient occupancy and that vacation rental is licensed under Chapter 509 then a Real Estate broker’s license does not appear to be required.
Some Rental Agents who normally rent short term vacation rentals can run into problems if they rent one of those rentals for a year and do not have a Broker’s license.
Some other exemptions to Chapter 475 are “any salaried employee ~ who works in an onsite rental office of an apartment community in a leasing capacity” and “any person employed for a salary as a manager of a condominium community ~ if rentals arranged by the person are for periods no greater than 1 year.”
Chapter 509, Part I
All vacation rental units are required to be licensed under Chapter 509. The individual or company managing the vacation rental is not required to have a license under this chapter; however, the actual vacation rental unit itself is required to be licensed.
Chapter 509 applies to Public Lodging Establishments and includes both transient public lodging establishments and non-transient public lodging establishments.
Chapter 509 requires each public lodging establishment to obtain a license and the license classifications include “Vacation rental” and “Non-transient apartment or rooming house”. A license for a vacation rental is required for only one rental unit; however a license for a non-transient apartment or rooming house is only required if there are five or more units in the establishment.
Some of the sections of Chapter 509 Part I apply to both transient and non-transient rentals and some sections apply to only transient rentals. Most of the sections that apply to transient rentals only are much more in favor of the operator or landlord than some of the sections of Chapter 83 which are much more in favor of the tenant. These operator friendly sections apply to transient occupancy which Chapter 509 defines as: “occupancy when it is the intention of the parties that the occupancy will be temporary ~ when the dwelling unit occupied is not the sole residence of the guest, the occupancy is transient.”
Some of these “Operator Friendly” sections include: “operators right to eject undesirable guests” and “operators right to lock out the guests from the guest’s rental unit until payment arrangements have been made”.
In summary, it does not appear that you or your company needs to be licensed for vacation rentals for temporary occupancy; however, those vacation rental units themselves do need to be licensed under Chapter 509 even if it is only one unit. If you are managing associations you need a license under Chapter 468. If you are managing long term rentals and are not an on-site manager of a condominium or apartment community, then you need a real estate brokers license under Chapter 475.
Dennis Fuller is a local property manager of vacation rentals in the Thomas Drive area and long term rentals, condominium associations, and apartment communities in the Panama City area and you can view his blog at www.cpservices.net/blog/.