Municipality of San Juan Enacts Ordinance to Regulate Short-Term Rentals

On May 19, 2023, the Mayor of San Juan signed and enacted a municipal ordinance that codified the “Regulation for Establishing a Short-Term Rental Registry in the Municipality of San Juan” (the “Regulation”). The Regulation, which will be enforceable by May 29, 2023, requires all property rentals for a period of less than ninety (90) days (“short-term rentals”) within the territory of the Municipality of San Juan to comply with certain requirements in order to obtain a license for authorized operations in residential communities.

According to the Regulation, its main purpose is to “reinforce the security, residential coexistence, infrastructure management, and planning of the Capital City”. Additionally, the Regulation “guarantees economic development and the citizens’ right to generate additional income through the use of their properties, safeguarding the security and health of the guests that choose the Capital City as their vacation destination.”

The Regulation requires that property owners, property holders, or administrators (together, the “Authorized Individuals”) that wish to use a property, or a portion of it, as a short-term rental, obtain a yearly license from the Permit Office in order to do so. Among the requirements for obtaining such license, Authorized Individuals must submit evidence of compliance with licenses and/or regulations imposed by the concerned government agencies including, but not limited to, Hotel Registration and ID number, Merchant Registry Certificate, when applicable, and a Single Permit (Permiso Único) from the Permit Office, when necessary. Additionally, the Authorized Individuals must provide the property number, certify compliance with all regulations and covenants that affect the subject property, and identify the platform in which the property will be listed for short-term rental.

In order to obtain the license, Authorized Individuals will be charged an annual fee of $100 for shared residential units[1] and $500 for non-shared residential units[2] and movable property. Once issued, the license will contain the Authorized Individual’s contact information, physical address of the property, property number, amount of available parking spaces for the property, number of rooms and maximum occupancy, the Puerto Rico Tourism Company Registry Number, date of validity, a copy of the Single Permit (when applicable), among others. The license shall be printed and placed in a visible area within the property, subject to inspection at any time. Also, the unique short-term rental license number must be included in the property’s listing.

On the other hand, the Regulation prohibits commercial activity from taking place in short-term rentals and the residential nature of the community cannot be altered. However, should a social event take place in the subject property, such activities may not interfere with the peace in the community where it is located, including by excessive or unnecessary noise. Authorized Individuals and their tenants must comply with every law, ordinance, or Regulation that is applicable to the area. Failure to do so will result in fines, which will be imposed to the tenants of the short-term rental, with a copy of such fine delivered to the Authorized Individual within 10 days. If the tenant does not satisfy the fine after 30 days of issuance, the Authorized Individual will be responsible for making the required payment within an additional 15 days, in which cases the Authorized Individual may demand compensation from the tenant in a claim that does not involve the Municipality.

Failure to comply with the Regulation and/or obtaining the short-term rental license will result in fines to the Authorized Individual and, in the second and third infractions, fines will be accompanied by a prohibition from obtaining short-term rental licenses for 1 and 3 years, respectively.

A process for requesting the license under the Regulation will be provided by the Permits Office in the coming days and we will be providing an update accordingly. Please do not hesitate to contact us with any questions or inquiries.

[1] “Shared Residential Unit” refers to principal residence units in which a portion of such unit is utilized for short term rental.

[2] “Non-Shared Residential Unit” refers to residential units used for short-term rental that do not have a portion used by any other party as principal residence. In these cases, a manager or intermediary is available to tend to the guests.