Santa Cruz County Vacation Rental Ordinance

DISCLOSURE ISSUES AND DEADLINES RELATING TO THE
SANTA CRUZ COUNTY VACATION RENTAL ORDINANCE

By: Terry Rein
Bosso Williams, APC

Santa Cruz County’s vacation rental ordinance was approved unanimously by the California Coastal Commission on July 12, 2011.  The vacation rental ordinance applies to a single-family dwelling unit, duplex, or triplex (including condominium and townhouse units, but not including apartments or manufactured homes in a mobile home park), which are rented for the purpose of overnight lodging for a period of not more than thirty (30) days.  The vacation rental ordinance affects the entire unincorporated area of the County (but not incorporated cities and not the Pajaro Dunes area).  Some of the vacation rental ordinance regulations include:

• Maximum Occupancy.  The maximum number of guests allowed in a vacation rental cannot exceed two people per bedroom plus two additional people, except for celebrations and gatherings between 8:00 a.m. and 10:00 p.m., when the maximum number of people allowed is twice the maximum number of guests allowed.  Children under 12 are not counted toward the maximum numbers.

• Local Contact Person. All vacation rentals are required to designate a contact person within a 30-mile radius of the vacation rental. The contact person shall be available 24 hours a day to respond to tenant and neighborhood questions or concerns. The name, address, and telephone number(s) of the local contact person must be submitted to the Planning Department, the local Sheriff Substation, the main county Sheriff's Office, the local fire agency, and supplied to the property owners of all properties located within a 300 foot radius of the boundaries of the parcel on which the vacation rental is located. The name, address and telephone number(s) of the local contact person must also be permanently posted in the rental unit in a prominent location(s). Any change in the local contact person's address or telephone number shall be promptly furnished to the agencies and neighboring property owners.

• Signs. All vacation rentals are required to have a sign identifying the structure as a permitted vacation rental and listing a 24-hour local contact person responsible for responding to complaints and providing general information.  This sign must be placed no more than 20 feet back from the nearest street. The sign may be of any shape, but cannot exceed 216 square inches. There is no minimum sign size so long as the information on the sign is legible from the nearest street.

• Posting of Rules. Vacation rental rules must be posted inside the vacation rental in a location readily visible to all guests. The rules need to include, but not necessarily be limited to, the following: number of guests allowed (2/bedroom + 2, children under 12 not counted; for celebrations and gatherings between 8:00 a.m. and 10:00 p.m., the maximum number of people allowed is twice the maximum number of guests allowed ), number of vehicles allowed (not to exceed the number of existing on-site parking spaces, plus two additional on-street spaces), noise, illegal behavior and disturbances, trash management (e.g., trash to be kept in covered containers only).

• Noise. All residential vacation rentals are required to comply with the County’s noise ordinance (Chapter 8.30 of the County Code) and a copy of that chapter must be posted inside the vacation rental in a location readily visible to all guests.

• Transient Occupancy Tax. Each residential vacation rental owner is required to meet the regulations and standards set forth in Chapter 4.24 of the County Code, including any required payment of transient occupancy tax for each residential vacation rental unit.  Owners of vacation rentals must obtain a permit and pay transient occupancy taxes.

Existing vs. New Permits.  There are two types of vacation rental permits, existing and new.  To be considered for an existing vacation rental permit the owner shall provide a complete application to the Planning Department within 90 days after the certification of the ordinance by the California Coastal Commission, including evidence of payment of the applicable Transient Occupancy Tax.  The benefit of obtaining an existing vacation rental permit is that no public hearing or notice of application for a permit is required.  AN APPLICATION FOR AN EXISTING VACATION RENTAL PERMIT WILL NOT BE ACCEPTED BY THE COUNTY IF SUBMITTED AFTER THE 90 DAY DEADLINE.

Live Oak Designated Area.  In the Live Oak Designated Area (“LODA”), a new vacation rental permit cannot be approved if 20 percent or more of the total parcels on that block are existing vacation rentals.  In addition, no more than 15 percent of all of the parcels that allow residential use in the LODA may contain vacation rentals. Notwithstanding these maximums, each block in the LODA that has parcels that allow residential use may have at least one vacation rental. Staff reports that they believe that around 10% of all parcels in the LODA are vacation rentals, but this information has not been confirmed.  If eligible, owners should move quickly to apply for an existing vacation rental permit in the LODA.  The 90 day deadline is all the more important for vacation rentals in the LODA.

Life of a Permit.  Each vacation rental permit runs with the land in perpetuity, except a vacation rental permit issued for property located within the LODA expires five (5) years from the date of issuance of the original permit.

Revocation of Permits.    Vacation rental permits are subject to revocation as provided for in County Code Section 18.10.136.  A permit may be revoked upon a finding that any term or condition of the permit has not been, or is not being complied with or that the permit has been issued or exercised in violation of any statute, law or regulation, or in a manner which creates a nuisance, or is otherwise detrimental to the public health and safety. Following the revocation of a permit, no application for a permit for the same or substantially the same use on the same parcel shall be filed within one year after the date of revocation, without the prior consent of the Board of Supervisors.

Disclosure Issues.  When selling property in the unincorporated area of the County outside of Pajaro Dunes, Realtors should consider disclosure issues relating to the new vacation rental ordinance.  Where appropriate, it is recommended that a copy of the vacation rental ordinance be given to prospective purchasers.  If requested by the purchaser, a proposed sale could be conditioned upon the issuance of a vacation rental permit.  If a client has questions, they should be referred to the County Planning Department, and the County Treasurer-Tax Collector for Transient Occupancy Tax issues, to obtain more information. Most importantly, clients need to be informed of the 90 day deadline to apply for an existing vacation rental permit, because failure to do so could result in a loss of a valuable property right.