PART 2: Beyond the Beach – Summer Rental Regulations

Summer Rental Regulations: What Shore Homeowners Must Know in Monmouth & Ocean Counties

Understanding summer rental regulations is essential for any homeowner looking to rent out their Monmouth/Ocean property.

In Part 1, we discussed the diverse options for renting out your Monmouth or Ocean County property. Now, we turn to the most critical aspect for homeowners: the legal landscape of short-term rental regulations. This is where many property owners, eager to capitalize on the summer demand, can inadvertently find themselves in hot water. Ignoring these rules can lead to substantial fines, forced rental cancellations, and even legal action.

At Zager Fuchs, our real estate attorneys are continually tracking the ever-evolving municipal ordinances affecting short-term rentals (STRs) in these counties. Our goal is to empower you with the knowledge to operate compliantly and protect your valuable asset.

The Non-Negotiables: Key Regulations for Homeowners

It cannot be stressed enough: short-term rental rules vary drastically from one town to the next. What’s permissible in Long Branch might be strictly forbidden in Wall Township. Always verify with your specific municipality.

Here are the crucial areas where you, as a homeowner, will face regulations:

1. Permits and Licensing: Your First Legal Step

This is often the first and most critical step. Many towns require you to obtain a specific short-term rental permit or license before you can advertise or rent your property. This process typically involves:

• An annual application and associated fees.
• Providing proof of ownership.
• Designating a “Responsible Party“: This is an absolute must. You’ll likely need to name a local contact (yourself, a relative, or a property manager) who can be reached 24/7 and respond quickly (e.g., within 1-2 hours) to issues like noise complaints or emergencies. This individual often needs to be a New Jersey resident.

2. Stay Limits: How Long Is Too Short (or Too Long)?

Municipalities are cracking down on party houses and transient activity. Be prepared for:

• Minimum Night Stays: Many shore towns enforce minimum rental periods, especially during peak season (e.g., no rentals less than 7 days between May 15 and September 30).
• Maximum Rental Durations/Annual Caps: Some towns limit the total number of days your property can be rented short-term per year (e.g., 180 cumulative days) or may prohibit rentals under 30 days entirely in certain residential zones.

3. Safety First: Inspections and Code Compliance

Your property must be safe for your guests. Expect requirements such as:

• Certificate of Occupancy (CO) / Rental Inspection: Before you get a permit, your property will likely need to pass an inspection to ensure it meets fire, safety, and building codes (e.g., proper smoke/carbon monoxide detectors, fire extinguishers, safe egress, compliant electrical/plumbing).
• Occupancy Limits: You cannot overcrowd your rental. Towns set strict maximum occupancy limits based on property size and number of bedrooms, and exceeding these can lead to fines.

4. Don’t Forget the Taxes: What You Owe (and When)

Beyond your personal income tax on rental earnings, you’ll be responsible for collecting and remitting:

• New Jersey Sales Tax (6.625%) on transient accommodations (rentals under 90 days).
• New Jersey State Occupancy Fee (5%).
• Potential Municipal Occupancy Tax (up to 3%) depending on your town. Even if platforms like Airbnb or Vrbo collect some taxes on your behalf, you are still legally responsible for ensuring all required state and municipal taxes are properly reported and remitted.

5. Keeping the Peace: Nuisance & Neighborhood Rules

Towns have clear expectations for how your rental operates within the community:

• Noise Ordinances: Strict enforcement of quiet hours is common, and repeated violations can jeopardize your permit.
• Parking Regulations: Ensure adequate on-site or designated parking.
• Trash Disposal: Clear guidelines for trash and recycling are usually provided and must be followed.

6. HOA Rules: The Often-Overlooked Barrier:

This is critical: Even if your town permits short-term rentals, your individual condominium or homeowner association (HOA) may have its own stringent rules or outright prohibitions against them. Always review your association’s master deed and by-laws. An HOA violation can be more costly and impactful than a municipal one.

 

When to Seek Legal Advice from Zager Fuchs:

Navigating this intricate web of regulations can be daunting. We strongly advise homeowners to seek legal counsel in the following situations:

• Before listing your property for the first time: Ensure you meet all municipal permitting and licensing requirements in your specific town.
• If you receive a cease and desist order or a notice of violation from your municipality or HOA.
• When drafting or reviewing rental agreements/leases: Ensure they are compliant with New Jersey landlord-tenant laws and include necessary clauses to protect your interests.
• If you’re unsure about tax obligations or how to properly collect and remit state and local occupancy taxes.
• If you are facing an HOA dispute regarding your rental activities.
• If you have questions about liability for your rental property and appropriate insurance coverage.
• If you are considering a long-term rental but need to understand the distinct legal differences from short-term rentals.

Your shore home should be a source of income—not legal stress. The attorneys at Zager Fuchs can help you navigate the complexities of rental laws so you can rent with confidence and peace of mind. Contact us today to protect your investment and stay compliant.