Cupertino Municipal Code Ch. 5.08 Short-Term Rental Activity

The purpose of this Chapter is to regulate Short-term Rental activity, which the City Council finds could have the potential of creating negative impacts to residents and impacting the availability of long term housing units due to the lucrative nature of the business. This chapter provides a process by which a residential unit may be registered with the City of Cupertino for use as a Short-term Rental unit, as an incidental Home Occupation.

(Ord. 20-2200, §4 (part), 2020)

Throughout this chapter the following words and phrases shall have the meanings ascribed in this section. All other definitions are as defined in Section 19.08.030.

A. "Host" means a natural person or people who offer(s) short-term rentals in their primary residence.

B. "Hosting platform" means a person, legal entity or an association of individuals that provide a means, which may or may not be internet-based, through which a short-term rental is offered to the public, in exchange for a fee or other compensation. A hosting platform generally has the following attributes: allows a host to advertise a short-term rental, and provides a means to arrange and enter into agreements to occupy short-term rentals, whether payment of rent is made directly to the host or through the hosting platform.

C. "Hosted stay" means that the host is occupying the primary residence during the entire term of a short-term rental.

D. "Local Contact" means the host or a person designated by a host who shall be available during the term of any short-term rental for the purposes of:

1. Responding within sixty minutes to complaints regarding the condition or operation of the short-term rental, or the conduct of guests, and

2. Taking appropriate remedial action to resolve such complaints.

E. "Short-term Rental" means any legally permitted dwelling unit, or portion thereof, made available for rent on a transient occupancy basis.

F. "Transient" is defined in Section 3.12.020.

G. "Un-hosted stay" means that the host is not occupying the primary residence when the primary residence is being used as a short-term rental.

(Ord. 20-2200, §4 (part), 2020)

A. Short-term rental activity is allowed to be conducted as a home occupation within a primary residence subject to further restrictions in this Chapter. Short-term rental activity is not permitted if the dwelling unit is not used as a primary residence.

B. No dwelling unit or portion thereof shall be advertised or used as a short-term rental unless the host has registered the Short-term Rental in the registry created by the City as provided in this Chapter and obtained a City business license.

C. In addition to the applicable standards in Section 19.120.030, all short-term rentals shall conform to the following minimum standards:

(Ord. 20-2200, §4 (part), 2020)

A. The short-term rental registration shall be submitted on a form provided by the City, accompanied by all information requested, including the following (as applicable), and the registration fee:

1. Name, contact information, and identification of host. All adults for whom the property is a permanent residence shall be listed as host. All hosts must provide official government identification that confirms their full legal name as it appears on the application.

2. Property location.

3. Site plan and/or floor plan indicating the location of proposed Short-term Rental. Host may designate more than one Short-term Rental within a primary residence, but may enter into only one rental agreement per night.

4. Proof of Primary Residence: Registrant shall provide documentation that the property where the short-term rental activity is to be conducted is the host's primary residence.

5. Owner Approval: If the property is to be rented by a long-term renter or someone other than the owner, Registrant shall provide a letter of approval from the owner.

6. HOA Approval: Any property with a Homeowner's Association (HOA) shall provide a letter of approval from said HOA Board.

7. Local Contact: Registrant shall provide the contact information for the designated local contact.

8. Consent to Inspections: Consent to inspection(s) by City staff for the purpose of verifying compliance with this Chapter during regular business hours (7:30 a.m. to 5:30 p.m.) or if in response to a complaint, regardless of the time.

9. Identify the guest parking space(s) on a site plan.

10. Acknowledgment of compliance with City requirements.

11. An agreement to hold harmless, indemnify and defend the City against claims and litigations arising from or related to the issuance of the short-term rental registration. Such claims expressly include those arising from any damage, loss, injury or death that may occur during any short-term rental activity.

12. An agreement to provide records of compliance to the City upon request.

13. For renewals or continuation of existing short-term rental activities, in addition to the above: Proof of remittance of Transient Occupancy Tax and any such information requested to allow verification of the amount of tax paid.

14. If the host has engaged in short-term rental activities at other properties within the City, a list of property locations and proof of compliance with City requirements, including payment of Transient Occupancy Tax, at those properties.

B. Fee: The host shall pay a registration fee prescribed by City Council resolution, no part of which shall be returnable to the registrant.

C. Registration Number. Upon submission of the registration application and fee, the City shall provide the applicant with a unique City short-term rental registration number. The registration number shall be designated as "pending" until the registration is complete.

D. Term of Registration: Registration of a short-term rental shall be on a calendar-year basis and must be renewed annually. Registration of a short-term rental is non-transferable and expires automatically upon sale, re-lease or transfer of property on which the short-term rental is located.

E. Registration: The short-term rental shall be registered only if:

1. The short-term rental registration is complete with all required information and the proposed short-term rental complies with all requirements;

2. The short-term rental and the property on which it is located currently comply with all provisions of the Cupertino Municipal Code;

3. The short-term rental and the property on which it is located have not had two or more violations of the Cupertino Municipal Code within the last twelve months from registration submittal and have not been denied registration or had registration revoked within the preceding twelve months;

4. The host has not had two or more violations of the Cupertino Municipal Code within the last twelve months from registration submittal related to any short-term rental, has not been denied registration for any other short-term rental within the preceding twelve months, and has not had a short-term rental registration revoked at any time; and

5. Operation of the short-term rental is not a public nuisance or threat to the public health, safety, or welfare.

6. As used in this subsection (E), the term "violation" shall mean any violation of the Cupertino Municipal Code, as evidenced by a City-issued citation, unresolved notice of violation, unresolved cease-and-desist order, or other appropriate documentation. Each unique violation of the Cupertino Municipal Code shall constitute one violation.

F. Registration Number Confirmation. Upon registration, the City shall confirm the short-term rental registration number and remove the "pending" designation.

(Ord. 20-2200, §4 (part), 2020)

A. Revocation of registration. A short-term rental registration may be revoked for the following reasons:

1. That the registration was obtained by misrepresentation, false statement or fraud;

2. That the short-term rental activity is being conducted in violation of local or state law;

3. That two violations of the Cupertino Municipal Code have occurred on the property on which the short-term rental is located within the preceding twelve months;

4. That the short-term rental activity has caused or is causing a serious threat to human health or public safety; or

5. That consent to an inspection is not provided.

6. As used in this subsection (A), the term "violation" shall mean any violation of the Cupertino Municipal Code, as evidenced by a City-issued citation, unresolved notice of violation, unresolved cease-and-desist order, or other appropriate documentation. Each unique violation of the Cupertino Municipal Code shall constitute one violation.

B. Process: In any case where substantial evidence indicates that the conditions in Section 5.08.050(A) exist, revocation proceedings shall occur as follows:

1. The City Manager or his or her designee may issue either a notice of pending revocation or a notice of suspension pending revocation, the latter of which shall require immediate suspension of all short-term rental activity pending a final determination regarding revocation. Any notice of suspension shall explain why the short-term rental activity presents an immediate, serious threat to human health or public safety. The notice shall detail the grounds for potential revocation of the permit and allow thirty calendar days for submission of a written statement and/or supporting documentation disputing such grounds.

2. The City Manager's or his or her designee's determination shall be made not more than thirty calendar days after the deadline for submittal of documentation provided on the Notice. The determination shall be mailed to the host, the property owner (if applicable) and the local contact.

3. All notices and determinations shall be mailed to the host, the property owner (if applicable), and the local contact.

4. The Director of Community Development is authorized to issue administrative guidelines to further define procedures for making revocation determinations.

C. Appeals: If the registration is revoked, the holder shall have the right to appeal the decision as follows:

1. The appellant must file a notice of appeal with the City Clerk within fourteen calendar days of the date of the revocation decision.

2. The matter shall be scheduled for hearing before an independent hearing officer selected by the City Manager or his or her designee no more than thirty calendar days from the receipt of the appeal.

3. The appellant shall be served with notice of the time and place of hearing, as well as any relevant materials, at least seven calendar days prior to the hearing.

4. The hearing may be continued from time to time upon mutual consent. At the time of the hearing, the appealing party and the City Manager or his or her designee may present such relevant evidence as he or she may have relating to the determination from which the appeal is taken.

5. Based upon the submission of such evidence and the review of the city's files, the hearing officer shall issue a written notice and order upholding, modifying or reversing the determination from which the appeal is taken. The notice shall be given within a reasonable time after the conclusion of the hearing and shall state the reasons for the decision. The notice shall be mailed to appellant, and if different from the appellant, the host, the property owner, and the local contact. The notice shall specify that the decision is final and subject only to judicial review in accordance with law.

(Ord. 20-2200, §4 (part), 2020)

A. Hosting platforms shall be responsible for collecting all applicable transient occupancy taxes and remitting the same to the City, unless the City and hosting platform have entered a valid voluntary collection agreement or other agreement for the collection and remittance of transient occupancy taxes for short-term rentals. The hosting platform shall be considered an agent of the host for purposes of transient occupancy tax collections and remittance responsibilities pursuant to Chapter 3.12 of the Municipal Code.

B. Hosting platforms shall retain records documenting the compliance with this section for a period of three years after any short-term rental, including, but not limited to, records indicating the history of all short-term rental reservations on the subject property from the hosting platform, records indicating the payment of any and all transient occupancy taxes (including via a hosting platform on behalf of a host), type of stay per reservation (hosted or unhosted), length of stay per reservation, and number of persons per reservation. A hosting platform that does not categorize their listings as hosted or unhosted stays, must retain records that provide good faith approximation of hosted or unhosted stays.

C. Hosting platforms shall be required to prompt hosts to include the City-issued registration number in their listing(s), in a format designated by the City. Upon notice from the City that a listing is non-compliant, hosting platforms shall cease any short-term rental booking transactions for said listing(s) within five business days. A hosting platform shall not complete any booking transaction for any residential property or unit subject to a City notice, until notified by the City that the residential property or unit is in compliance with the local registration requirement.

D. Safe Harbor. A hosting platform operating exclusively on the internet, which operates in compliance with subsections (A), (B), and (C), shall be presumed to be in compliance with this Chapter, except that the hosting platform remains responsible for compliance with Section 5.08.070(D).

E. The provisions of this Section shall be interpreted in accordance with otherwise applicable State and Federal law(s) and will not apply if determined by the City to be in violation of, or preempted by, any such law(s).

(Ord. 20-2200, §4 (part), 2020)

A. Any host violating any provision of this Chapter, or hosting platform that violates its obligations under Section 5.08.060, shall be guilty of a misdemeanor.

B. Any person convicted of violating any provision of this Chapter in a criminal case or found to be in violation of this Chapter in a civil or administrative case brought by the City, shall be ordered to reimburse the City and other participating law enforcement agencies their full investigative costs and pay all back transient occupancy taxes.

C. Any host who violates any provision of this Chapter, or hosting platform that violates its obligations under Section 5.08.060, shall be subject to administrative fines, citations and administrative penalties pursuant to Title 1.

D. In accordance with Government Code sections 37104 to 37109, as may be amended, the City Council may issue and serve administrative subpoenas as necessary to obtain specific information regarding short-term rental listings located in the City, including, but not limited to, the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing and the price paid for each stay, to determine whether listings comply with this Chapter. Any subpoena issued pursuant to this section shall not require the production of information sooner than thirty days from the date of service.

E. The remedies provided in this Section are not exclusive, and nothing in this Section shall preclude the use or application of any other remedies, penalties or procedures established by law.

(Ord. 20-2200, §4 (part), 2020)

A. The city manager or designee is hereby authorized to promulgate administrative rules, regulations and interpretations to implement this chapter. Said rules and regulations may include, but are not limited to, revisions to the registration process, requirements of operations, etc.

B. Record of local contact information: The City shall maintain a list of registered short-term rentals with "Local Contact" contact information.

(Ord. 20-2200, §4 (part), 2020)