Rental Dwellings and Short-Term Rentals

While localities may have their own definition for purposes of its zoning ordinances, in general, a rental dwelling may generally apply to any building or portion of a building used as a residence for rent for a period of one month or longer. In contrast, a short-term rental is the use of any residential unit for occupancy for fewer than 30 days.

Cities and Counties have broad discretion, under state law, to enact land use regulations that prohibit, permit, or conditionally permit a particular use of property. However, a total prohibition on renting or leasing property is likely an illegal restraint on property rights, and goes beyond the mere regulation of property to place emphasis on regulation of the person rather than the land, exceeding a local government’s zoning power.

Nevertheless, Utah courts have upheld more tailored rental regulations, such as restricting the short-term rental of residential properties or imposing an owner-occupancy requirement in order to rent an accessory dwelling unit in a home, as a legitimate means of preserving the single-family character of residential neighborhoods.

The ability to allow or restrict the use of property as a short-term rental is delegated to the discretion of local communities. However, state law provides that a local government may not (1) enact or enforce an ordinance that prohibits the mere listing of a short-term rental on a short-term rental website, or (2) take any enforcement action against an individual solely for the act of listing or offering rental on a short-term rental website. Such ordinances or enforcement action improperly place a restriction on speech instead of addressing the actual use of property for rental purposes. Local governments may, however, use online listings as evidence of a zoning violation as long as it has additional information besides the listing to support the violation, and may also provide the listing to the county auditor as evidence that transient room tax may be owed for the property.

Local governments may enact ordinances requiring the owner or lessee of a short-term rental to obtain a business license or other permit before operating within the community, except that state law prohibits cities and towns from requiring a license to operate a short-term rental if no compensation is received from the rental’s use.

Alta v. Ben Hame Corp (1992) - using a building originally designed and constructed as a single-family dwelling as a “lodging facility” was not an accessory use customarily incidental to the main use within the meaning of the zoning ordinance.

Brown v. Sandy City Bd. of Adjustment, 957 P.2d 207 (Ut Ct App 1998) - Short-term leases of residential properties were not prohibited because the zoning code did not limit residential use by referencing the type of estate the occupying family held in the property or the duration of the occupancy.

Anderson v. Provo City Corp, 2005 UT 5  - requiring owner-occupancy in order to rent accessory apartments in single-family residential zones near BYU was not illegal.

South Weber City v. Cobblestone Resort (2022) - operator of short-term rental in single-family dwelling did not have a legal nonconforming use under prior ordinances by falling within city definition of “dwelling” where this focused only on the structure itself and not the structure’s use.