Getting it Right – The Quirks Around STR Occupancy Limits

As a realtor who specializes in helping people find vacation rental properties, I see a lot of interesting interpretations of the rules which is one of the primary reasons we have so many rules. You should assume that to operate a vacation rental or short-term rental in the Poconos, you will need a municipal license. It is very rare that a municipality in this tourist area doesn’t identify where STR is allowed (zoning) or have a STR Ordinance which defines the home requirements, the licensing and inspection processes.

In Pennsylvania, municipalities have been able to issue licenses since 2019 and in the 4-county Pocono area there are approximately 6,800 licensed STRs spread across 74 municipalities. Add sections of Luzerne and Lackawanna counties and these numbers grow even higher. Each township has their own unique way of doing things. If you are looking across the region for an investment, you will see some similarities and some common concerns.

One of the biggest variables is property occupancy. Just about every municipal STR ordinance defines occupancy based on bedroom count. Most common is 2 people per bedroom plus an additional 4 guests per stay. Bedroom count from a real estate perspective is not the same as bedroom count from a STR license perspective, so this is where you should pay a little more attention to detail. The STR ordinances typically go further to define bedroom count based on the sewage system capacity. Since we have very few public sewer systems in the area, the capacity limit ties to the home’s septic system holding tank and this does not always match with the homes current layout. Homes may have converted unfinished space into extra bedrooms but may not have upgraded the septic systems to match. When a home is used as a primary residence, there are no occupancy restrictions if everyone is in the same family, so it may have been perfectly legal to add bedrooms without increasing septic system capacity.

A quick indicator is to check is the tax records to see how many bedrooms are registered with the county assessment office. Your realtor can provide you with these kinds of reports. They are not always are not always updated so you should be diligent in this search. If you want to know for sure, you should contact the Sewage Enforcement Officer for the municipality and ask for the records. The township issued a permit to have a septic and they require that the sizes be part of that permit. These are public records, so you might have to submit a right-to-know form.

Sometimes the work has been done without a permit, sometimes regulations have been tightened since a STR permit was first issued. If you are the first STR license holder for a property, you might have some extra work to do. My friends at Ideal Property Management put together a few tips in how one might go about upgrading/upsizing a home:

• Septic requirements must be verified first to check septic capacity or sewer capacity if on public/community sewer. (Sewer authority must be contacted by property owner to verify capacity and written verification provided)
• A zoning permit (change of use) must be applied from the township and will be issued after an on-site inspection (number of bedrooms and bathrooms will be listed on the permit)
• A building permit from the township must be applied for and issued if none has been filed. In some cases, the permit may not have been closed out, the township can help you understand what has been filed and what is needed.
• A building certificate of occupancy/compliance is issued from the township.
• A zoning certificate of compliance is issued after an onsite inspection showing the total number of legal bedrooms and bathrooms.
• The property owner must produce the building certificate of occupancy/compliance and the zoning certificate of compliance with a signed letter to the County Assessment office requesting the additional bedrooms to be added.
• The County Assessment Office will complete a review of the application and update the number of bedrooms to the property in the tax records.
• Only when the property is updated by County Assessment Office in their records will
any changes be reflected on any permits in the Township.

The county and the townships don’t automatically synch their records. Not all STR inspections and licenses may have been thorough, so you do want to double check. As the municipalities all look to increase their oversight of rental properties, it is important that you ask questions and confirm next steps. Your realtor can help, but the best course of action is for you to do the due diligence yourself to protect you from getting stuck with a big, expensive problem.

Remember, when you run a STR, you are hosting guests, their health and safety is paramount. The regulations and the inspections are designed to avoid tragedy and assure that guests have a successful experience, it is the right thing to do. If you are looking to purchase a home that hasn’t been licensed as a STR, you should be extra diligent in making sure what it is that you are buying. Even if it has a STR permit, you should check to make sure the permits are all good.

After you have your sights set on a property, Ideal Property Management can help you navigate through these issues and get you live with your listings, feel free to give Marty a call at ‭(908) 472-0531‬.

For some additional insight on setting up and operating a STR, please visit the Poconos Realtors STR Page

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