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Small Inns Assoc. voice suggestions to proposed bill regulating short-term rentals

Members of the Puerto Rico Small Inns Association proposed a list of minimum requirements that should be included in a bill in the works to regulate independent short-term rental accommodations.

The legislation is being drafted in the Puerto Rico House Tourism Commission and should be presented in coming weeks, the trade association confirmed.

For the past 11 years, the Puerto Rico Small Inns Association has made specific recommendations to the relevant agencies, based on the best practices implemented in hundreds of cities in the United States to reduce tax evasion, improve the availability of affordable housing, and protect the healthy coexistence in residential communities.

Their suggested recommendations to the new legislation are “clearly defining what constitutes a short-term rental accommodation and arming the Puerto Rico Tourism Co. with the appropriate statutes and resources to be successful in regulating the sector,” among other conditions.

The association defines a short-term rental accommodation as “a facility, house, apartment, room, or property, that provides, through compensation, lodging for one or more people, for 90 days or less; and must comply with the registration requirements and obtain the required state and municipal licenses and permits; comply with applicable codes, zoning, and regulations; and reflect its hostel license number in its advertising and promotion, whether written, verbal, or digital.”

The group states that there is a need for mechanisms for monitoring and compliance of industry regulations, as well as a system to identify accommodations in areas or locations where they are not allowed.

The group also believes in setting up incentives for municipalities to support monitoring and setting substantial penalties and fines for non-compliance to owners, hosts, and platforms.

The short-term rentals should be required to register with the relevant local authorities, something that may only be done by the property’s owner, the trade group proposed. That registration should be done at the Puerto Rico Tourism Co. and the town where the property is located.

The short-term rental business should be subject to paying municipal taxes, having a merchant registration and other licenses required for all businesses, the Association stated.

Furthermore, the group suggested establishing a maximum number of short-term rental units that a person or entity can operate in each municipality. The operator should also have authorization from the residents’ association, if located in a condominium or a gated community.

The Small Inns Association also lists imposing responsibilities on owners, hosts, platforms, and online travel agents, such as:

  1. Provide information to hosts and guests about the norms of healthy coexistence and the Code of Public Order applicable in the location;
  2. Ensure the collection and remittance of the occupancy tax, on time;
  3. Advertise only registered properties and include the hostel registration number in all advertisements; and,
  4. Periodically provide certain information and statistics to the Tourism Co., Discover Puerto Rico, the Puerto Rico Treasury Department, and the municipality.

The Association also noted the need to assign an 11%occupancy tax and assign 2% or 3% of that to the municipality where the short-term rental is located to assist in monitoring. The short-term rentals must also be subject to the current oversight process related to the payment of the occupancy tax, in full and on time.

“We recognize the benefits and harms that the independent accommodation sector represents for the development of tourism and the visitor’s economy, and we advocate for a “leveled playing field in this market,” said Xavier A. Ramírez, president of the Small Inns Association.

“We believe that all short-term-rental accommodations must comply with the laws, regulations, ordinances, licenses, and permits applicable to all businesses; must be prepared to protect their guests and the communities where they are established; and must pay the corresponding taxes and fees, in addition to the occupancy tax,” he said.

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This story was written by our staff based on a press release.

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