Permitting Short-Term Rentals in Nashville
Short-term rentals have taken off in recent years.
Since its inception in 2008, Airbnb has been responsible for opening an entirely new side of hospitality.
And that’s not just good news for travelers.
It’s great news for real estate investors and homeowners that would like to make money by listing their properties, full-time or part-time, as vacation rentals.
Short-term rentals were largely unregulated for many years, which led to some upset neighbors and increased legislation.
Part of Metro’s upgraded guidelines included permits for short-term rentals.
Here’s how to get a short-term rental permit in Nashville:
Create a Floor Plan
Obtain Proof of Liability Insurance
Provide Proof of Notification to Adjacent Property Owners
Provide Proof of Residence
Provide Proof of Tax Payments
Provide A Responsible Party
Obtain A Homeowners Association Statement
Provide A Notarized Affidavit
Meet with A Zoning Examiner
Schedule The Fire Marshal’s Inspection
Pay The Permit Fee
Post Your Permit on Your Listing
In this step-by-step guide to getting a short-term rental permit, we’ll show you how to go about the process, provide you with a free checklist if you’d like to do it yourself, or you can hire us to take care of everything for you.
The Different Types of Short-Term Rentals in Nashville
Metro Nashville determined that not all short-term rentals are created equal. So, let’s dive into the two different types of short-term rental permits that Nashville has to offer.
Owner Occupied (OO):
Metro Nashville gives the following guidelines for what qualifies as an Owner-Occupied Short-Term Rental.
Owner-occupied residence or on a lot with an owner-occupied residence.
Includes the rental of an entire dwelling unit to a single party of individuals, or
If only part of the unit, includes at a minimum one sleeping room and a bathroom, and is limited to a single party of individuals.
Owner-occupied status must be confirmed by two documents showing that the owner in fact occupies this as their primary residence. Acceptable documents may include a Tennessee driver’s license, State of Tennessee ID card, Davidson County voter registration card, pay stub, work ID or badge, IRS W2 form, or bank statement.
Such documentation of primary residence address must match the deed as recorded with the Davidson County Clerk's office.
To qualify for an owner-occupied permit, the owner of the property must permanently reside at the property and be a natural person or persons. LLCs, corporations, trusts, partnerships, joint ventures and other entities are ineligible for owner-occupied permits.
Only one permit shall be issued per lot in single-family and two-family zoning districts.
The property ownership of two-family units cannot be divided. They shall be owned by the same person and one of the two units shall be the primary residence of the owner. Two-family units can include detached duplexes divided under a Horizontal Property Regime (HPR).
Owner-occupied permits are the best way to go for individuals that permanently reside in the home where they want to operate a vacation rental.
Since the ownership entity of the real estate must be in the owner’s actual name (and not an entity), it largely excludes short-term rental investors.
Much of the new legislation came about because neighborhoods were tired of having to deal with (often rowdy) travelers.
These permits are intended for us in residential neighborhoods where the short-term rental aspect of the property will be ancillary to its primary use as a home.
Non-Owner Occupied (NOO):
Here are Metro Nashville’s guidelines as to which properties may qualify for non-owner occupied permits.
Are not owner-occupied or on a lot with an owner-occupied principal residence.
Rentals are limited to a single party of individuals.
Ownership information on the application must match the deed as recorded with the Davidson County Clerk's office.
New not owner-occupied permits will only be issued as a use permitted with conditions (PC) in RM2 through RM20-A, RM40 through RM100-A, MUN and MUN-A, MUL and MUL-A, MUG and MUG-A, MUI and MUI-A, OG, OR20 through OR40-A, ORI and ORI-A, CN and CN-A, CL and CL-A, CS and CS-A, CA, CF, DTC North, DTC South, DTC-West, DTC Central, SCN, SCC and SCR zoning districts. UPDATE: Pursuant to BL2019-1633, new permits in RM zones will no longer be issued effective January 1, 2022.
Permits for Specific Plan (SP) zoned properties or properties within a Planned Unit Development (PUD) will be issued only if allowed by the SP or PUD. Please contact the Metro Planning Commission for questions regarding the conditions of the SP or PUD, planningstaff@nashville.gov or 615-862-7190.
New not owner-occupied permits are not permitted in AR2A, R, or RS zoned properties. Existing permit holders in these zoned districts may be eligible to apply for renewals, but those permits are not transferable if the property is sold or transferred.
All of the zoning that permits non-owner occupied short-term rentals is commercial.
Metro decided to allow NOOs in commercial zoning where the city intended businesses to be operated.
Many investors have moved on to building or buying their short-term rentals in commercially zoned areas not only because of government regulation, but also because these areas can be attractive for guests since they’re usually near bars, restaurants, and other activities.
Which Permit Does Your Property Qualify For?
The fastest way to determine which short-term rental permit your property qualifies for is to enter your address on the Metro Parcel Viewer.
On the top right-hand corner of the page, you’ll find a magnifying glass symbol.
Click that symbol and select “Address or Intersection.”
Type in your property’s address and hit “Search.”
After your property’s information has been pulled, you’ll see several tabs on the left-hand side.
Select “Zoning History.”
If your property has one of the NOO zonings listed above, you’ll qualify for a non-owner occupied permit.
If your property does not have one of those zonings, you may only qualify for an owner-occupied permit.
Applying for Your Short-Term Rental Permit
Metro Nashville has created quite the process for obtaining your short-term rental property (STRP) permit.
For a first timer, it can be very difficult.
The Codes Department asks that anyone applying for a short-term rental be prepared ahead of meeting with a zoning examiner.
Preparing all of the necessary documents and information ahead of the application process will certainly cut back on any permitting delays and multiple trips to the Development Services Center.
One thing to keep in mind, too: you are not allowed to list your property as a short-term rental anywhere prior to obtaining a permit. If you do, your property will be ineligible to even apply for a short-term rental permit for one year.
We’ve created a Short-Term Rental Permitting Checklist to guide you through the process.
Step 1: Create a Floor Plan
First, you’ll need a floor plan of the property that you plan to short-term rent.
This floor plan must include all of the rooms that will be available, as well as the location of windows, doors, and smoke detectors.
Metro requires all sleeping areas, rooms in the path of egress from sleeping areas to the exit, and every story of the property (including basements) to have a smoke detector.
There is a maximum of four bedrooms per STRP permit - anything above that will not be granted a short-term rental permit.
However, you could list a five-bedroom home as a four-bedroom and obtain a permit from Metro, but you cannot advertise anywhere that the home has more than four bedrooms or you will be in violation of Metro’s regulations.
If you need a referral to a qualified space planner to help put your floor plan together, contact us here.
Step 2: Obtain Proof of Liability Insurance
Metro requires each STRP to demonstrate proof of insurance showing coverage for homeowner’s fire, hazard, and liability insurance.
Coverage may not have limits less than $1,000,000, but isn’t required to exceed that.
Airbnb offers insurance in some cases, but you can also work with a local insurance broker to make sure you’re getting the best deal.
If you need a referral to a qualified short-term rental insurance agent, contact us here.
Step 3: Provide Proof of Notification to Adjacent Property Owners
In order to qualify for a short-term rental permit, you must provide Metro Codes with proof that you have notified your neighbors of your intent to operate your property as a vacation rental.
Proof of written notification can be any of the following:
a signature of an owner;
a signed receipt of U.S. registered or certified mail addressed to an owner; or
notice from the U.S. Postal Service that registered or certified mail to an owner was refused or not timely accepted.
If the adjacent property is owned by the Metro Government, notification is not required.
Metro Codes has compiled a step-by-step guide on how to identify adjacent property owners.
Step 4: Provide Proof of Residence
In order to receive an owner-occupied permit, you must show two forms of proof of evidence.
These documents must show the address of the residence on which you are applying for a permit.
Approved documents that provide proof of residence are:
A Tennessee driver’s license
Any other State of Tennessee identification cards
Davidson County voter registration card
Pay stub
Work ID or badge
IRS W2 form
Bank statement
Utility bills are not accepted by Metro Codes as proof of residence.
Step 5: Provide Proof of Tax Payments
You must provide proof that you’ve paid any and all taxes due on the property.
These include property taxes and permit renewals, as well as applicable room, occupancy, and sales taxes required by the state or Metropolitan Code.
Step 6: Provide A Responsible Party
In case of an emergency or complaint against your short-term rental, there must be a locally accessible “responsible” party.
This person must live within a 25-mile radius of your short-term rental.
You will need to provide Metro with their name, phone number, physical address, and email address.
Step 7: Obtain A Homeowners Association Statement
If your property is in a neighborhood or building governed by a Homeowners Association (HOA), you will need to provide a written statement that you are not in violation of any HOA agreements, bylaws, Condominium Agreements, or covenants, codes, and restrictions (CCRs) for the property.
You can access a template Homeowners Association Statement provided by Metro Codes here.
Step 8: Provide A Notarized Affidavit
You will have to provide Metro with a notarized affidavit that confirms all of your application information is true and accurate.
Click here for the STRP Affidavit.
If you’re planning on hiring a short-term rental property manager or if they are going through the permitting process for you, they will need this third-party authorization, as well.
Step 9: Meet with A Zoning Examiner
After you’ve collected everything in Steps 1 - 8, you’re prepared to meet with a zoning examiner in order to start your application process.
To do so, you will have to go down to the Development Services Center at Metro Codes.
It is highly recommended that you arrive by 7:30am in order to be placed in the queue to meet with an examiner.
With all of Nashville’s explosive growth over the last 10 years, there are many applicants seeking various permits at Metro, so if you don’t arrive early, you won’t make the cut.
You may also try checking in on their online queue, but I’ve personally never had any luck using it.
Step 10: Schedule The Fire Marshal’s Inspection
After your short-term rental application has been submitted, you’ll need to schedule a fire inspection for the property.
You can schedule an inspection directly by emailing FMORequest@Nashville.gov.
In your email, include the temporary permit number, property address, your name, your and phone number.
Step 11: Pay The Permit Fee
Once you’ve passed inspection, you’re ready to pay the government’s cut.
Your permit fee of $313.00 may be paid via cash, check, or credit card.
Step 12: Post Your Permit on Your Listing
After you’ve obtained your short-term rental permit, you’re required to post a picture of it to any and all online listings.
Do not forget this step!
Forgetting to share this to your listings could result in a revocation of your permit or denial of your renewal.
But Wait, There’s More…
After you’ve received your permit, you will have an ongoing responsibility to remain in compliance.
Remit All Required Taxes
Throughout your operation of the short-term rental, you are required to remit any sales and hotel taxes to the appropriate agencies.
STRs are treated like a hotel, so you are responsible for occupancy taxes.
Renew Your STR Permit
Unfortunately, your short-term rental permit will only be valid for 1 year.
Every year, you will need to go through the short-term permit renewal process in order to remain compliant with Metro regulation.