Update: Since the drafting of this post, the below rules were approved and adopted. The final rules will take effect on April 10, 2019.

Homeowners operating short-term housing rentals in Denver will soon have a few more boxes to check prior to renting out their homes on popular hosting platforms such as Airbnb and VRBO.

While operators of short-term rentals are already required to be licensed by the City and County of Denver, new rules regarding the operation of short-term rentals in Denver are expected to be enacted next month, according to the Department of Excise and Licenses.

The proposed rules will require that short-term rental operators: (1) notify both their insurance company and any applicable homeowners association that the property is intended to be used as a short-term rental, and (2) maintain liability insurance on the property in an amount no less than one million dollars.  The homeowner’s insurance company must be notified prior to any short-term rental transaction being processed, regardless of whether a liability policy is ultimately obtained through that company.  Any homeowners association requiring notification must be notified prior to obtaining a short-term rental license.

Additionally, the proposed rules give city officials broad leeway to revoke or deny a short-term rental license for “good cause,” subject to judicial review.  Good cause is defined in the rules as either (1) any violation of the applicable rules, regulations, or terms and conditions placed on a short-term rental license, or (2) evidence that the rental property has been, or will be, “operated in a manner that adversely affects the public health, safety, or welfare of the immediate neighborhood in which the property is located.”

The Director of the Department of Excise and Licenses will have the authority to fine, suspend, revoke or refuse to renew any short-term rental license for failure to comply with the above rules.  This is in addition to any penalties prescribed by the Denver Revised Municipal Code.