By Thomas J. Major
On November 5, 2019, voters in Jersey City, NJ approved expansive regulations on “short term rentals” commonly listed on Airbnb, VRBO and similar sites. These regulations (codified in Chapter 255 of the Jersey City Municipal Code) permit short rentals only in limited circumstances. Ordinance 19-077 promises to have wide-spread effects on multi-family properties in Jersey City. These effects range from the legality of short term rentals to licensing criteria and penalties for non-compliance. But, the discussion should begin with: Who can list on Airbnb after 19-077?
Chapter 255 of the Jersey City Municipal Code regulates short-term rentals after January 1, 2020. To understand the ordinance, it is first necessary to know the definition of a short-term rental. Short-term rentals are those residences which meet three conditions. First, the property must be a residential property offered for occupancy by someone other than property’s owner for less than 28 consecutive days. Second, the property must be regularly used and kept open for the lodging of transient guests. Lastly, the property must be advertised or “held out to the public” as a place regularly rented to transient occupants. Put simply, a short-term rental is one advertised for short stays by non-owners.
After January 1, 2020, short-term rentals not specifically permitted by Chapter 255 are prohibited. Permitted short-term rentals are capped at 60 nights, unless specific owner-occupancy criteria are met. There are only 5 categories of permissible “cap free” short-term rentals. These categories, all predicated upon owner-occupancy, are:
(1) owner-occupied condominium units where short-term rentals are permitted by the master deed and/or by-laws of the condominium association;
(2) single-family residences (offering no more than 3 rooms);
(3) two-family properties where the owner occupies one residence;
(4) three-family properties where the owner occupies one residence;
(5) four-family properties where the owner occupies one residence.
According to Steven Fulop, Mayor of Jersey City, the purpose of the owner-occupancy requirement is to permit “…the homeowner looking to supplement their mortgage or tax payment…” to do so while preventing investors from “…rapidly acquiring homes in communities to convert into hotels…”
For non-owner occupied premises (subject to the 60 day cap) there are additional restrictions. For example, tenants are not permitted to offer their leased property for short-term rental. Only the owner of a property (subject to the ordinance) may do so. Regardless of ownership, short term rentals are not permitted in government-subsidized (in one way or another) or rent-controlled properties.
Anyone who violates Ordinance 19-077 is subject to fines and potential additional penalties. Importantly, each night of an illegal short-term rental is a separate violation. This cumulative effect creates substantial liability. Anyone considering listing their property for short term rental should make meticulous compliance with Ordinance 19-077 a priority.
Thomas Major, Esq. is a principal with Offit Kurman, P.A., which maintains a broad-based landlord and property owner representation practice. In New Jersey, Offit Kurman represents landlords and property managers in maximizing return, resolving disputes and avoiding unnecessary and costly delays. The Firm’s New Jersey geographic practice area includes: Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Hackensack, Bergen County and other points across New Jersey. Thomas can be reached at 732/218-1800 or via the website at www.offitkurman.com.