If you’ve considered investing in Bella Vista, you’ve likely heard about the city’s ongoing efforts to regulate short-term rentals. On December 18, 2022, the city council finally passed applicable regulations requiring all short-term rentals operating within the city to secure a license by June 27, 2023. In this article, I will outline the new Bella Vista regulations.
Basic Requirements of the Bella Vista Regulations
The city has imposed new requirements on those wishing to operate a short-term rental. Note that this only applies to properties offering stays less than thirty consecutive days. Month-to-month rentals—which in recent years have increased in popularity on popular booking channels such as Airbnb—are not affected.
- Properties utilizing a septic tank must provide the city with a report from a licensed septic installer or inspector “certifying the septic system on the property is operational within requirements of the AR Department of Health.”
- The applicant must prove that they have secured adequate insurance for the operation of a short-term rental.
- Applicants must also provide a general site plan showing the existing structures and available off-street parking. Short-term rental guests are prohibited from parking on the street.
Initial licensure fees will be $150, with an annual $100 renewal fee.
Bella Vista Regulations of Owner-Occupied Properties
The rules are slightly different for properties that serve as the owner’s primary residence. While the city has capped the number of licenses at 600, this cap does not apply to owner-occupied properties. In addition, the initial licensure fee is only $50, with free renewals.
The ordinance, however, leaves ambiguous what constitutes an owner-occupied property. Some wording of the new Bella Vista regulations suggests that the owner must be occupying the property as their permanent residence when it is being rented, but it’s not completely clear. So, it’s hard to tell whether someone who lives in Bella Vista ten months out of the year but rents out their home the other two would qualify for the owner-occupied property provision. It may only apply when someone rents a room in their home.
Currently, the new Bella Vista regulations fail to provide for a clear application process, so it’s unclear how the process will actually work. More information is expected when applications become available at the beginning of February. Per the ordinance, however, the license will be granted if the applicant meets the following requirements:
- The property passes a city safety inspection, the details of which remain unclear. (Properties less than five years old are typically exempt from this requirement.)
- The property must display the owner’s contact information and the local point of contact, if applicable. (Absentee hosts will no longer be permitted. Owners must have a local representative.)
- The property has a minimum of two off-street parking spaces.
Once the permit is issued, occupancy of the property will be limited to three guests per bedroom for properties on septic and three guests per bedroom plus two for properties on sewer.
Questionable Provision in the Bella Vista Regulations
There is already talk of short-term rental owners filing a lawsuit to enjoin the ordinance from taking effect. We are not a part of these discussions or the grounds on which such a lawsuit would be filed, but there is one particularly questionable provision in the ordinance.
For the first thirty days after applications become available, only Bella Vista residents may apply. This appears to violate a legal principle known as the Dormant Commerce Clause, as articulated and affirmed by the United States Supreme Court. That is, the Supreme Court has held that state and local governments may typically not burden interstate commerce, particularly not in such a way that favors local commercial interests over others. This is something that the Bella Vista regulations explicitly do.
So, it will be interesting to see how this plays out, particularly if someone does choose to file a lawsuit against the city. If such a lawsuit is filed, we would not be surprised if the ordinance is enjoined, at least temporarily.
How We’re Preparing
Regardless of what happens with any potential lawsuit, we are preparing for the implementation of this new regulatory regime to ensure that all our Bella Vista clients can continue to operate in compliance with these new requirements. We have extensive experience with such regulatory compliance issues, already assisting Fayetteville clients in abiding by the regulations that that city has imposed.
In addition, one of our founders is a licensed Arkansas attorney, having experience practicing law in both the private and public sectors. In fact, he has over six years of experience as a government attorney, so we believe we are well-equipped to handle this issue for our clients.
How We Can Help You
If you own or are considering purchasing a short-term rental property in Bella Vista, we would be happy to speak with you about how we could potentially be of assistance. Please schedule a call with us or email us for any additional information.
If you’re interested in learning more about how Weekender Management can help you get started in real estate, schedule a call with us today!