Downtown Denver, Colorado

Denver’s New Short-Term Rental Laws and How they Affect Owners

Short-term rentals (STRs) have become big business, especially in a popular destination like Denver. Sites like Airbnb have made it easier than ever to make money off your residence, but not everyone is following the rules, especially after the City and County of Denver updated it’s STR policy in April of 2019. Let’s learn about the new STR rules and how they affect Denver vacation rental owners and hosts.

New Changes for Denver Vacation Rental Owners

The new rules were created by the Short-Term Rental Advisory Committee, a collection of rental hosts, owners, industry stakeholders, attorneys, and other professionals. The group met 19 times between 2016 and 2019 before issuing the new rules.
The first change clarifies what the city views as grounds for revoking STR licenses. The new provisions state an STR license can be “revoked or sanctioned, and an application for a new license can be denied if a rental property is found to be adversely affecting the public health, safety, or welfare of the immediate neighborhood in which the property is located.” In other words, if you’re causing problems for your neighbors, Denver has the right to revoke your license.
The second change deals with insurance and property owner liability. Denver now requires STR license holders to carry $1 million in liability insurance for the rented property. Most STR sites like Airbnb carry their own insurance policies which comply with the Denver rules.
Lastly, All STR license holders must inform their Homeowners’ Association or another governing body as well as their homeowner’s insurance company if they plan to rent out their primary residence.

Standard Denver Short-Term Rental Regulations

Before the changes, there were already rules and regulations which remain in effect. One of Denver’s unique regulations is requiring any short-term rental owners first to become licensed with the city. Rental owners can apply for a license at Denver’s website. STR licenses cost $25 with an annual $25 renewal fee.
Like many other cities, Denver only allows short-term rentals of primary residences. A primary residence is considered the “usual place of return for housing as documented by at least two of the following: motor vehicle registration, driver’s license, Colorado state identification card, voter registration, tax documents, or a utility bill.” Click edit button to change this text.

STRs can only book stays between 1 and 29 days.

A readout of all rules and regulations regarding short-term rentals and license requirements can be found at Denver’s Business Licensing website.

Following the Rules

The new packet of rules and regulations with short-term licensing is already helping the city manage short term rentals. According to Denver, 72% of STR hosts follow the laws compared to 52% last year. STRs are good for Denver, but only if the hosts follow the law.

Know the codes

Whether it’s Denver, Breckenridge, or Baton Rouge; all cities, towns, and even neighborhoods have different regulations about renting a property. There’s nothing that will impact your vacation rentals income potential more than not being able to rent it out. Be sure to read all the local codes and by-laws before making an investment so you don’t find yourself with an unusable short-term rental.