City of Bozeman Vacation Rental Rules

Today I had the opportunity to present to a great group of realtors at Berkshire Hathaway Home Services Montana Properties about the rules for Vacation Rentals in Bozeman.  As Vacation Rentals Montana expands into Bozeman / Gallatin Valley this quick summary should be helpful to anyone considering a short term rental property in the area.

The Bozeman City Commission adopted regulations for Short Term Rentals (formerly known as extended stay lodgings) that are effective as of December 1, 2017. City Of Bozeman Ordinance 1974 states that all new Short Term Rentals must comply with the new regulations.

The new rules come with a $250 annual registration fee and a one-time fire inspection and heath inspection fee (around $500).  There is also a $40 fee to the state.  Renewal is $250 yearly to the city and $40 to the state.  

In the simplest form, the ordinance was a ban / death penalty on vacation rentals with a few exceptions.  

In R1 and RS rentals are only allowed if the owner is present.  This would be old fashioned AirBnB type rentals where you are home sharing (renting rooms in your house).  This is even limited to just two bedrooms in the dwelling, excect that in a two-bedroom dwelling, only one bedroom may be rented or offered for rent. 

The owner of a Type-1 short term rental may rent or offer for rent up to two bedrooms in the dwelling, except that in a two-bedroom dwelling, only one bedroom may be rented or offered for rent.

In R2 and up as well as HMU owners can rent their homes when they are not there up to 6 months a year and only if it is their primary residence.

The only opportunity for a “full time” short term rental in a residential zoning district is when the owner is on property and rents an ADU or duplex.  If an owner lives in one side of the duplex they could rent the other side. 

Zoning of B2, B2M, B3, and UMU does allow short term rentals (B1 does not).

Through this process some existing vacation rentals were grandfathered in.  Those permits are connected to the homeowner and not the property so over time these rentals will go away.  

The City of Bozeman registration process does not address every issue which may be applicable to operation of a short term rental, including but not limited to taxes, insurance, health code, and other legal issues outside of the City’s regulations. Persons interested in having a short term rental should also check mortgage or lease/rental terms, home owner covenants, and insurance policies as standard homeowner’s insurance may not cover short-term rental use. Check to make sure you have adequate home, personal property, and liability insurance.

Insurance companies that offer a specialized product for vacation rentals are CBIZ and Proper.

Here are a few helpful links:

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