A legislative committee will hear a bill on April 6 that would impact how vacation rentals operate.
The bill LD 436, “An Act to Require Providers of Short-term Lodging to be Licensed,” would affect the approximately 22,000 vacation rentals in the state. It would require those who rent a second home or a cottage for less than seven days at a time be licensed as if the property was a hotel, motel, or a bed and breakfast.
In 2013, the Vacation Rentals Professionals of Maine beat back an effort to regulate vacation rentals the same way hotels, motels and inns are regulated. The Health and Human Services Committee issued an “ought not to pass” recommendation and the bill died in committee.
LD 436 would require vacation homes be rented for at least seven consecutive days. If they are rented for less time than that, vacation homes would fall under the same licensing requirements of motels, hotels and inns.
According to Executive Director Greg Dugal of the Maine Innkeepers Association, the bill is designed to create a more level planning field between innkeepers and vacation rentals.
The new bill is less restrictive than the one proposed last session, but it would have major consequences on vacation rentals’ ability to rent their properties, according Audrey Leeds-Miller, the Vacation Rental Professionals of Maine’s president.
Leeds-Miller is the co-owner of Cottage Connection in Boothbay. The business assists property owners in renting their second homes or cottages. She believes the bill is a misguided attempt at regulating the industry.
“We’ve got a problem here. The problem is the bed and breakfast industry is upset and they are holding a grudge,” Leeds-Miller said. “They are trying to get rid of these big rental houses that they see as competition.”
She described those renting a vacation homes as seeking a unique lodging experience. If LD 436 is enacted, she believes those customers will seek that experience in another state.
“It’s a totally different customer. Ours are more likely to wake up in the morning dressed in their bathrobe and cook their own breakfast,” Leeds-Miller said. “They (innkeepers) need to stop thinking of us as the competition, because we’re not.”
The Maine Innkeepers Association disagrees.
Dugal said if vacation rentals want to provide short term lodging, then they should be treated like one. According to Dugal, vacation rentals have significantly cut into motel, hotel and bed and breakfast industry for one- and two-day stays. These businesses are heavily regulated, while vacation rentals are not.
“Our industry adheres to all kinds of regulations regarding safety. State law requires those who engage in transient lodging for 1-2 day periods be licensed. If these vacation rentals wanted to engage in this type of business, then they should be licensed,” he said.
State law requires motels, hotels and inns to carry appropriate licenses, insurances and safety equipment. Leeds-Miller believes requiring the same measures for vacation rentals would drive them out of business. She described many of these vacation rentals as older properties that assist owners in paying the upkeep and taxes.
Leeds-Miller said most vacation rentals already have basic safety features in place. The licensing requirement would require more extensive safety standards like equipping homes with sprinkler systems. She believes that type of requirement is both impractical and onerous.
“We already have fire and carbon monoxide detectors in place, but a $5,000 sprinkler system is out of the question,” Leeds-Miller said. “There is no way a private home could afford such an expense. Many of these rentals don’t make that much in a season to cover such a cost. It would drive them out of business.”
Leeds-Miller believes the driving force behind both bills is the owner of a Bethel bed and breakfast, Kathy Thrall. She has owned the Inn at The Rostay for 18 years.
Both bills sponsored by state Sen. John Patrick (D-Rumford), Thrall’s state senator.
Thrall said she asked Patrick to sponsor both bills. She expects to testify during the Heath and Human Services Committee hearing. Thrall said she plans on telling the committee the same thing she told them last time. She perceives unlicensed lodging as having an advantage over licensed properties.
“It’s cutting into our business, and it’s not fair,” Thrall said. “They are doing the same exact thing by renting for the day or weekend, but they don’t have jump through all the hoops we do.”
Thrall said she’s been urging for licensing vacation rentals since 2003. She believes the previous bill, LD 330, died in committee because of the sheer volume of the state’s vacation rental properties. Thrall recalls a committee member telling her that an Internet search found over 20,000 Maine lodging places.
“The committee told me licensing vacation rentals would be too big and overwhelming,” Thrall said.
Leeds-Miller hopes a large contingent of vacation property owners attends the April 6 hearing. She believes a large turnout is important because her group is not as organized as the Maine Innkeepers Association. Leeds-Miller said the committee needs to be reminded of Maine’s tradition of vacation property rentals.
“We’re not breaking any laws or doing anything wrong,” Leeds-Miller said. “Wedding parties or family reunions want to rent a whole house so they can be together. There is no breakfast served or catering done. We do our own thing.”
Thrall said the competition is unfair because vacation renters can charge a lower price than a bed and breakfast.
“They aren’t regulated so they can charge a lower rental fee,” she said. “I had a ski team cancel a six-day booking because they found a house to rent at a cheaper price.”
The Health and Human Services Committee will conduct the legislative hearing in the Cross Building. The hearing begins at 9:30 a.m. on Monday, April 6 in room 209.