By Associated Press - Thursday, January 1, 2015

NASHVILLE, Tenn. (AP) - Internet websites like Airbnb are making it easy and lucrative for homeowners to rent out their properties to vacationers for a few nights at a time. But that has left cities across the state struggling with how to regulate these rentals, which are not contemplated in most zoning laws.

Do homeowners need some type of permit for short-term rentals, which are often in single-family residential neighborhoods? What taxes are homeowners required to pay? Do they need to install sprinklers in their homes?

The Nashville Ledger reports ( ) cities don’t have much guidance. But a 2009 decision by the Tennessee Court of Appeals that upheld the rights of homeowners has left some administrators feeling hamstrung.

In that ruling, a couple who rented out a home in Soddy Daisy was charged with violating zoning regulations for operating a commercial business in a residential neighborhood. The trial court agreed, fining the couple more than $22,000. But the appeals court overturned that ruling, saying the zoning regulations were unconstitutionally vague.

Burkley Allen, a member of Nashville’s Metro Council, is sponsoring local legislation that would require short-term renters to have proof of insurance and a permit and would regulate things like parking and occupancy. It would also amend Metro code to allow the rentals in all residential zoning areas, something that doesn’t sit well with people who think the rentals should be restricted to certain areas.

The legislation would not require homeowners to install sprinklers, which could put Metro at odds with the state fire marshal. Allen says the fire marshal wants sprinklers in vacation rentals after two people died in a fire at a Sevierville cabin last April.

Meanwhile there is the issue of taxes. Metro Treasurer Tom Eddlemon in November sent out 430 notices to Davidson County homeowners who were offering short-term rentals but were not paying a hotel occupancy tax. The letter gave the property owners 30 days to pay the same 6 percent tax on nightly revenues, plus an additional $2.50-per-night fee. They were to pay taxes from the first day they began renting.

As of Christmas week, Eddlemon said that more than 125 people had remitted tax payments totaling about $51,000.


Information from: The Nashville Ledger,

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