What Laws Do Minnesota Airbnb Hosts Need to Follow?

Short-term vacation rental lodging has gained popularity recently, and laws and regulations are beginning to catch up with this new form of lodging. For property owners considering this revenue stream, they must understand the various layers of rules and regulations involved—from the federal level, down to the local level.

Do Landlord-Tenant Laws Apply to Short-Term Rentals?

Short-term rentals are not subject to state landlord-tenant laws and seem to fall outside traditional hotel and motel lodging regulations. Cities and local municipalities have taken the lead in filling the void of regulation for short-term rentals, and many cities, even small ones, now regulate them.

At the federal level, homeowners must understand their obligations under federal fair housing law. Basing a decision of whether to rent to someone on that person’s status in a protected class will violate the law and could even potentially result in a federal law suit.

Do I Have To Collect Sales Taxes on My Short-Term Rental?

Yes. Regulation at the state level primarily involves the state revenue department. In Minnesota, a lodging retailer must collect, report, and remit sales and use taxes on the full sales price of lodging. Sales tax is due on lodging in Minnesota if the rental period is for one of the following periods:

• Less than 30 days
• 30 days or more if there is no enforceable written lease agreement that requires the customer give notice of their intention to end the lease

There are special tax rules for owners of short-term lodging who use an accommodations intermediary—an organization or platform that facilitates the sale of short-term residential property rentals. Under Minnesota law, any accommodations intermediary facilitating the sale of short-term rentals located in the state is responsible for registration as a retailer. Rental platforms and websites like Airbnb and VRBO are accommodations intermediaries under state law. In Minnesota, a residential property owner does not need to register to collect sales and use taxes if either:

• It uses an accommodations intermediary to facilitate all sales of lodging at the owner’s property
• Rental of its residential property by the owner is an isolated incident, not made in the normal course of business

Local Laws Regulating Short-Term Rentals

Many Minnesota cities and towns have short-term rental laws. Property owners are typically required to obtain a rental license to rent out their property. The requirements to obtain the license vary greatly based on city laws. The licenses ensure owners comply with local building and fire codes. Owners must also review local zoning codes to ensure short-term rentals are not prohibited in the property location.

Finally, don’t forget that if your property is subject to a homeowner’s association (HOA) agreement, that will present another layer of regulation property owners must comply with before listing their property for Airbnb rental or another short-term rental.

Minneapolis & Saint Paul

Property owners in Minneapolis and St. Paul who reside on the property they rent out are exempt from the Minneapolis code requirement for a short-term rental license. However, Minneapolis requires a short-term rental property registration for owners who rent out their homes and leave during a renter’s stay. For non-owner-occupied property that is rented out, Minneapolis requires owners to obtain a full rental license.

In St. Paul, the license structure is simple: Every owner needs a short-term rental host license to rent out their property to short-term guests. If the property is not owner-occupied, the city also requires the owner obtain a fire certificate of occupancy.

Find Experienced Legal Help

Before a property owner decides to begin renting out their real property for short-term rentals, they should sit down with an experienced Minnesota real estate attorney who can provide advice before problems arise with their new business venture. For more information on this area, check out our overview of real estate laws.