Inns, Hostels and the Spare Bedroom: Offering Vacation Rentals in Maine

by Rudman Winchell Attorney Jonathan P. Bench

Maine is Vacationland. According to a report commissioned by the Maine Office of Tourism, in 2013 over 16 million tourists visited Maine for leisure or to visit friends or relatives. Of the 10,195,297 leisure travelers, 80% stayed in paid accommodations, of which 8% of leisure travelers rented a cabin, cottage, condo or vacation home. Of those 5,879,314 travelers visiting friends or relatives, 37% stayed in paid accommodations, of which 3% rented a cabin, cottage, condo or vacation home. In addition to these numbers, the popular travel lodging service Airbnb (and its competitors) allows anyone with extra lodging space to become a host in the short-term.

Do these types of temporary rentals implicate landlord-tenant issues associated with longer-term residential rentals? For instance, are seasonal renters who rent cabins for an entire summer (or even just a month) considered tenants under Maine law? Maine statutes contains several defined terms scattered throughout different code sections. A review of these seemingly related terms gives some insight into the status of Maine vacationers and the legal duties of their hosts.

First, residential real property is real estate consisting of one to four residential dwelling units. Second, in Maine there are three distinct terms of art that could apply to residential real property for rent: (1) rental property, (2) lodging place and (3) vacation rental. A rental property is a dwelling unit where a residential landlord-tenant relationship is established, such as under a typical residential lease for an established term. A lodging place generally refers to a place where sleeping accommodations are furnished to the public for business purposes, such as, hotels, motels, bed and breakfasts and inns. It includes a property under common management where four or more rooms, cottages or condominium units are rented to the public. The term “lodging place” does not include vacation rentals, permanent residences, rooming houses, tenancies at will or rental properties with tenant and landlord relationships. A vacation rental is a residential property that is rented for vacation, leisure or recreation purposes for a day, a week or a month, and typically under 30 days but not for more than an entire summer or winter season, to a person who has a place of permanent residence to which the person intends to return. The related term “innkeeper” means a person who keeps an inn, hotel or motel to provide lodging to travelers and others for compensation and who maintains the sleeping accommodations. An innkeeper is not a landlord pursuant to the landlord and tenant laws but must be licensed by the licensing board of a municipality, typically comprised of its municipal officers.

Unless the property owner intends to establish a landlord-tenant relationship, when drafting contracts for rental accommodations, property owners should ensure they are only granting a license to their lodging guests and not a leasehold interest. In 2007, the Supreme Judicial Court of Maine conducted a fact-based analysis in Benham v. Morton & Furbish Agency, to determine whether the renters were “tenants” (more rights) or “licensees” (fewer rights; not to be confused with an innkeeper “license” granted by a licensing board). Factors pointing toward a license relationship in a lodging context include: whether the owner retained keys; had free access to the room; had a right to enter for repairs; lived in the building; posted a doorman or desk clerk; provided meals, utilities, cleaning services, towels, linens, utensils, and furnishings; or held the premises out to the public as a place for travelers or lodgers. Other relevant factors included trash removal service and the collection of sales tax.

The lease language could explicitly reflect the tenant vs. licensee distinction to avoid establishing a landlord-tenant relationship in a temporary rental context:

Lessee represents and warrants to Lessor that the Premises is not Lessee’s principal residential dwelling, and Lessor and Lessee agree that Lessor is and shall be construed as an “Innkeeper” and the Premises is and shall be construed as a “Lodging house,” as each term is defined in 30-A M.R.S.A. § 3801.

A landowner should consult with the licensing board in the town where the rental property is located to determine whether the landowner should obtain an innkeeper license. If a license is required, or if the owner desires to obtain a license, then the owner needs to become familiar with additional statutory requirements in 30-A M.R.S.A. § 3801 et seq. If no license is required, the above language could be amended as follows:

Lessee represents and warrants to Lessor that the Premises is not Lessee’s principal residential dwelling, and Lessor and Lessee agree that the Premises is and shall be construed as a “vacation rental” as defined in 22 M.R.S. § 2491(17).

This information is provided as background information only. Landowners engaging in renting property or considering renting property for short- or long-term rentals should consult with a qualified Maine attorney to determine the scope of their responsibilities to their tenants or guests.