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The Basics of Legal Short-Term Rentals

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With the dawn of the Internet, a multitude of gifts was bestowed upon us: shopping from the comfort of our La-Z-Boys, the option to spend our afternoons watching hilarious cat videos at our desk instead of working, and, most importantly for today's lesson, the ability to rent or rent out the perfect home away from home from or to a perfect stranger. The growing popularity of sites like AirBNB, HomeAway, and FlipKey have made this type of house-swapping more mainstream. The only problem? Often these arrangements are illegal as the City of Chicago requires that anyone offering up a vacation rental must possess a Vacation Rental license (those pesky laws, always getting in the way of everybody's fun). The new ordinance was enacted in 2011 (perhaps with the ill-fated Olympic bid in mind?) and defines a vacation rental as essentially "a dwelling unit with up to six sleeping rooms that are available for rent or for hire, for transient occupancy by guests which are not owner-occupied."

In order to obtain a license, an applicant is required to pass a Department of Buildings inspection, a Department of Zoning board review, and file an application with the Department of Business Affairs and Consumer Protections – plus cough up $500 per location for the biannually renewable document (no wonder not having one's so common). The rental sites, for their part, say they're working to make these kinds of rules and regulations more familiar and accessible to users through the recently formed Short Term Rental Advocacy Center (no Chicago chapter as of yet).

Other shortened stay rental transactions, like sublets, come with their own set of regulations. In the case of subletting, or leasing a house or apartment that's already being leased by you to another person, the first resource to turn to is probably your lease. If the lease doesn't expressly include it, it's possible you may not have to mention your handing over the keys to somebody else to the landlord at all (which is why, as a landlord, it's probably a good idea to write it into the lease agreement). More often than not, though, the lease does mention a sublet scenario, which means you need your landlord's consent should you decide to sublease. Under Illinois law, even when a lease does require consent that consent cannot be "unreasonably withheld."

The Residential Landlord and Tenant Ordinance grants all Chicago renters the right to sublet their rental property, but it doesn't necessarily release you from your rental obligations. Say the person you got to take over your lease flakes out and doesn't end up paying the rent. Unless your landlord releases you from responsibility in writing, that's still on you. If you move out before finding somebody to sublet, your landlord is required to make an effort to re-rent your place, but if he or she can't, again, you're responsible for the remainder of the rent, as well as any advertising or redecoration expenses that may be required to bring on a new tenant. Moral of the story: make sure everything's in writing and you understand what your lease requires of you before you split. And try your best to find a reliable replacement tenant to save yourself and everybody else some potentially serious headaches (this is where that helpful Internet may come in handy again).

Occupying a property, or having your property occupied, for a shorter-than-your-average-lease length of time opens up a flexible world of possibilities – just remember to play by the rules. For more information on short-term rental law, check here.
·Rents Right [City of Chicago]
·Curbed University [Curbed Chicago]