Wilmington Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Wilmington, North Carolina?

Wilmington regulates short term rentals through its zoning and land use ordinances. The city defines short term lodging as rentals of up to 29 nights, with two main types:

• Homestays - Renting rooms in your home while living onsite
• Whole-house - Renting an entire home without host present

Previously there was a registration system and cap on the number of STRs, but this was ruled invalid by an appeals court in 2022.However other provisions remain, like limits on bedrooms, location restrictions downtown, and having an on-call local manager for whole-house rentals1.Hosts on Reddit and BiggerPockets share mixed opinions. Some praise the lack of registration and caps now. But issues like neighbor complaints persist, so relationships are key4.

Overall Wilmington takes a lighter touch than many cities after the court ruling. But zoning and nuisance regulations still apply. Hosts can operate smoothly by following rules and keeping neighbors happy.Specific requirements include:

• Proper insurance
• Limits on bedrooms
• Parking
• Safety standards
• Nuisance regulations
• Local manager for whole-house

Fines and penalties apply for violations. Complaints can be filed online or by calling 910-765-88441.So while registration is gone, other zoning and land use rules remain in effect. Checking all requirements for your property type and location is crucial before listing.

Starting a Short Term Rental Business in Wilmington

To start a short term rental business in Wilmington, you'll need to follow the city's regulations for short term lodging. The city defines short term lodging as overnight stays in a residence of up to 29 nights. There are two main types:

• Homestay lodging - Renting out bedrooms in your home while you live there and remain present during the rental period. This includes accessory dwelling units if you live on the property full-time.
• Whole-house lodging - Renting out an entire home without the host present. You must have a local operator within 25 miles who is available 24/71.

Short Term Rental Licensing Requirement in Wilmington

Previously, the City of Wilmington required all short-term rental operators to register with the city and enter an annual lottery to receive one of 400 licenses that were available each year.

This system was seen by many hosts as overly restrictive and limiting to the short-term rental market.However, in April 2022 the North Carolina Court of Appeals ruled that Wilmington's registration and lottery system was invalid under state law (Schroeder v. City of Wilmington). The court found that requiring registration and capping the number of short-term rentals violated a state statute that prohibits cities from requiring permits or registration for vacation rentals.

As a result, Wilmington can no longer enforce any registration or licensing requirements for short-term rental operators. The city also cannot limit the number of short-term rentals allowed. This court decision has essentially deregulated and opened up the short-term rental market in Wilmington.While licensing is no longer required, hosts still need to follow various city regulations related to parking, insurance, noise, occupancy limits and more.

Proper insurance coverage and having a local manager remain important for operating legally. But the barriers to entry have been significantly reduced.The recent court ruling has been praised by many hosts and property managers, allowing more homeowners to rent out rooms or entire homes to vacationers visiting Wilmington without burdensome red tape.

However, some residents have expressed concerns this could encourage more "party houses" without better oversight. Only time will tell how the market evolves in this new deregulated environment.

Required Documents for Wilmington Short Term Rentals

While the City of Wilmington no longer requires registration or licensing for short-term rental operators after recent court rulings, hosts still need to follow various city regulations and have proper documentation.

Insurance

You must have liability insurance that covers short-term rentals. This protects homeowners and guests in case of injuries, property damage, and other incidents. Typically you need at least $500,000 in liability coverage. Document this by having a certificate of insurance listing short-term rental coverage.

Parking

Make sure to have adequate off-street parking available for all guests, with at least one space per bedroom rented. The city can issue fines for parking violations.

Occupancy Limits

Comply with maximum occupancy rules based on the size of your rental unit. You may need to post a sign stating maximum guests. Never exceed two adults per bedroom, plus two additional adults. Document maximum occupancy clearly in your rental listing.

Local Manager

Appoint a local manager who lives within 25 miles of your rental and can respond to issues 24/7. Document this by having their name, address, phone number posted prominently in the unit. Also list the manager's contact info in your online listing and rental agreement.

Rental Agreements

Use a formal rental agreement clearly stating policies, fees, and local rules. Have guests sign this upon arrival. Keep these on file for at least a year.

Tax Documentation

Register with the city finance department to collect and remit the 6% occupancy tax from guests. Keep records of taxes collected and payments remitted.

Wilmington Short Term Rental Taxes

As a short-term rental host in Wilmington, you are responsible for collecting and remitting occupancy taxes on all bookings, just like hotels and other lodging establishments.

This helps support tourism infrastructure in the city.Specifically, you must collect and pay the 6% New Hanover County occupancy tax on the gross receipts from each rental. This applies to any short-term lodging rental under 30 days, whether you rent out an entire home or just a room.

As the host, it is your responsibility to register with the county tax department to collect and remit this tax. You will need to file regular tax returns, usually monthly or quarterly.

The occupancy tax is submitted separately from sales tax.Failure properly collect and remit the Wilmington occupancy tax can result in penalties, interest charges, audits, or legal action.

So it is important that hosts educate themselves and comply with tax regulations. Many use accounting software and services tailored for short-term rental taxes which can simplify compliance.

North Carolina wide Short Term Rental Rules

North Carolina has passed legislation that impacts how cities and counties can regulate short-term vacation rentals across the state. This law, North Carolina General Statute §160D-1207, was enacted in 2020 and places certain limitations on local short-term rental ordinances.

The key provisions of the state law are:

• Prohibits requiring registration or permits to operate short-term rentals
• Allows regulation of short-term rentals through general zoning and development standards
• Grandfathers existing short-term rentals from changes made to local ordinances
• Prevents ordinances that would terminate an existing short-term rental, except for failure to adhere to rental standards
• Allows regulation of the location and concentration of short-term rentals through zoning

This law has had a substantial impact on how cities in North Carolina approach regulation of short-term vacation home rentals. By banning registration and permitting schemes, many local governments have had to repeal those aspects of their ordinances.

However, the law does still grant local jurisdictions broad authority to impose general zoning, health and safety standards, noise rules, parking requirements, and other regulations on short-term rentals. As long as these rules apply generally and do not specifically target short-term rentals, they are permissible under state law.

So while the state law limits some tools available to cities and counties, it still allows a wide range of local regulations on short-term rentals. The law aims to balance private property rights of hosts, neighborhood concerns about rentals, and local government authority.

Going forward, striking this balance will continue to be a key issue as more vacation rentals proliferate across North Carolina.

Does Wilmington strictly enforce STR rules?

While portions of Wilmington's short-term rental ordinance were ruled invalid, the city retains the ability to enforce general zoning, safety, and nuisance regulations.

Fines for violations can potentially range from $100 to $500 per incident.However, with mandatory registration and permitting no longer allowed, the city's enforcement capabilities are more limited compared to the previous ordinance.

Officials have fewer tools to actively monitor and ensure compliance across Wilmington's short-term rental market.Anecdotal reports from hosts on sites like Reddit and BiggerPockets indicate enforcement tends to be complaint-driven now. Without neighbors filing noise or parking complaints, for example, officials are less likely to intervene at a particular rental property.

So while portions of the ordinance remain, enforcement appears more relaxed overall since the court decision. The intensity and scope of enforcement seems to vary case by case instead of being uniformly applied through registration data.

Some hosts even admit operating rentals that likely violate rules around zoning, occupancy limits or insurance requirements. Though taking such risks could still result in fines if eventually caught by authorities.

How to Start a Short Term Rental Business in Wilmington?

Starting a profitable and legal short-term rental business in Wilmington, NC requires careful planning and preparation. Follow this 7-step guide to launch your vacation rental business successfully:

Research regulations thoroughly.

Make sure you understand all current city ordinances, taxes, zoning codes, insurance obligations, and legal considerations that apply to short-term rentals in Wilmington. Consult local government agencies, read recent news articles, and connect with other hosts.

Choose the right property.

Consider factors like location, size, amenities, parking, neighborhood rules and more when selecting a rental property. Homestays and single family homes tend to work best. Ensure your property type and area meet all legal requirements.

Get proper insurance.

Work with an insurance agent to get complete liability and property damage coverage tailored specifically for short-term rental hosting. This is crucial to protect yourself from major risks.

Set up management and operations.

Create listings on sites like Airbnb, VRBO and Booking.com. Implement a process to manage reservations, communicate with guests, handle check-ins/outs, deal with issues, and maintain the unit between stays. You can self-manage or hire a local vacation rental management company to handle operations.

Market effectively.

Craft appealing listings with professional photos and descriptions. Promote your rental through social media, travel blogs, flyers, word-of-mouth and other channels to draw more bookings. Focus extra marketing efforts during peak tourist seasons.

Optimize pricing.

Research average local rates and occupancy levels to set competitive prices. Use dynamic pricing to adjust rates higher during peak demand periods and for special events. Offer discounts and deals strategically to fill gaps.

Comply with all laws.

From collecting occupancy taxes to following nuisance rules, make sure you fulfill all continuing legal and regulatory obligations. Stay updated on any changes in short-term rental laws.

Following these tips will help you build a successful and compliant vacation rental business in Wilmington.

Who to contact in Wilmington about Short Term Rental Regulations and Zoning?

• For complaints about short term rentals - Call 910-765-8844 or use the online complaint form
• For questions on zoning and regulations - Contact the Wilmington Planning Department at 910-341-3266 or planning@wilmingtonnc.gov

What do Airbnb hosts in Wilmington on Reddit and Bigger Pockets think about local regulations?

Opinions vary on Reddit and BiggerPockets, but with registration gone, most hosts are happy. Some hosts report continued issues with neighbors filing complaints. Others say they operate smoothly with few problems from the city.

Overall hosts see Wilmington as more welcoming to short term rentals than many cities. But neighborhood resistance remains an issue that hosts have to navigate. Having a good relationship with neighbors is key to avoiding problems.