It’s January 10th, 2019 and the Short Term Rental Law was signed into MA General Law on 12/28/2018.  The language used in this new law is very ambiguous.  For that reason the Massachusetts Association of Insurance Agents (MAIA) legal counsel has been in touch with the legislature to try and clarify.  At this time there is still some language whose  intent is not know.  Until resolved, here is a post from MAIA outlining the key points:

MAIA has already had several inquiries about this change, and in this update we will attempt to summarize the key provisions that affect agents and homeowners, and answer some FAQs.

Q. What does the law require from short-term rental owners?

  1. Referred to as “operators” in the law, homeowners who intend to operate short-term rentals must:
    • Register their property with the MA Department of Revenue;
    • Collect a 5.7% state lodging tax, along with any applicable city, town, or regional (Cape Cod) taxes; and
    • Maintain $1 million liability insurance to cover each short-term rental.

Note: Although operators who rent for 14 days or less per year can apply for an exemption from the taxes, they are still required to register and insure the property.

Q. What is the effective date of the law?

  1. Although the law doesn’t take effect until July 1, 2019, it applies to bookings being made NOW (since January 1, 2019) for stays on or after July 1, 2019.

Q. Definition of “Tenants”?

  1. There has been some confusion regarding the following section of the law:

“Such coverage shall defend and indemnify the operator and any tenants or owners in the building for bodily injury and property damage arising from the short-term rental.”

Based on initial research, it appears that the word “tenants” here refers to the tenants or owners of other units in a condo/apartment building, not to the short-term renters, who are termed “occupants” in the law.

We continue to seek clarity on this issue and anticipate Division of Insurance guidance over time.

Q. Where can I access the full law?

  1. HERE

MAIA will continue to provide updates as the details are ironed out.