Authored by Richard F. DeLucry, Esq.

Owners and operators of short-term rental properties-including hotels, motels, guest houses,  private residences and AirBnB’s-may soon have to deal with  potentially long-term involuntary vacancies.

Many New Jersey communities-particularly shore towns with large numbers of transient rental units-have expressed concerns that the continuing rental of those units during the COVID-19 crisis will bring an influx of visitors, undermining the State’s social-distancing directives and potentially increasing the risk of transmitting the virus. In response to those concerns, New Jersey’s Office of Emergency Management last Saturday issued Administrative Order No. 2020-8, which dramatically increased the authority of counties and municipalities to impose local restrictions on transient residential rentals.

Previously, local governments were permitted, under Executive Order No. 108 only to regulate “Online marketplaces for arranging or offering lodging…” A number of municipalities adopted regulations addressing online rentals. Those restrictions did not, however, apply to rental transactions which were not conducted online. A.O. 2020-8 , however, specifically expands local regulatory authority to:

“impose additional restrictions…on the ability of hotels, motels, guest               houses or private residences, or parts thereof, to accept new                                 transient guests or seasonal tenants after [April 5, 2020]”

A.O. 2020-8 excludes certain emergency and temporary residences from the definition of “transient guest or seasonal tenant”; but otherwise allows counties and municipalities essentially unlimited discretion to regulate short-term rentals-including the discretion to ban such rentals completely.

Left unanswered at this point are certain key questions: Will the regulations apply only to new occupancy agreements, or will they also reach existing agreements for future occupancy? Will any new regulations expire when the current State of Emergency is lifted, or continue until terminated by the municipality? These issues and others will undoubtedly arise as individual towns consider further rental regulations. Interested parties should act now to make their concerns known to the appropriate officials before the likely adoption of new local regulations.

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