Anyone renting rooms to tourists through home sharing sites like Airbnb has been offered an “amnesty” until the end of the year, before government begins cracking down on unlicensed properties.
The Hotel Licensing Board is offering a three-month grace period for property owners to get their paperwork in order or get out of the business.
After that, anyone subletting rooms, apartments or houses to visitors without a Tourism Accommodations License faces fines of $100 per day, per guest.
“Properties that fail to become licensed after the amnesty period is closed will be subject to the full fine as well as possible legal action.
“Independent tourism accommodations providers are encouraged to take advantage of the amnesty offer to safeguard against these consequences,” the board said in a statement.
Anyone who rents property of any kind, even a room in their own home, to tourists, must be licensed by the board, a process that involves inspections from the fire department, Department of Environmental Health and hotel inspectors and requires payment of room taxes to government.
Several residents using sites like Airbnb and vrbo.com to advertise rooms for rent have already taken their listings down after being warned they were breaking the law.
“The Hotel Licensing Board hopes that independent tourism accommodations operators will use the amnesty to educate themselves on Tourism Law and the licensing process,” the statement said.
Peter Huntingford, spokesman for Airbnb, told the Compass last month that the site brings in additional tourists and could help boost the Cayman Islands economy. He suggested it was unrealistic to expect people hosting visitors in their homes to meet the same criteria as hotels and offered to work with tourism officials in Cayman to find a solution.
The Hotel Licensing Board indicated, in its statement, that the current licensing regime would remain in place and said anyone who registers during the amnesty will be exempted from enforcement action.
“The Hotel Licensing Board is mandated to ensure that every overnight visitor to the Cayman Islands is given an experience reflective of the quality of the Cayman Islands’ tourism product. A Tourism Accommodations License demonstrates that a property has undergone the appropriate quality assurance procedures and is operating lawfully,” it added.
While some users of Airbnb, which has grown in popularity in Cayman over the past 12 months, have said the requirements are too much for private individuals simply making extra cash form their spare rooms, others welcome the enforcement.
Jim Keim, who has multiple rental properties in Cayman, including units at Ocean Pointe Villas and Villas Pappagallo in West Bay, said uniform regulations were needed.
“While Airbnb, VRBO, HomeAway, and others offer new ways to rent property, it is a serious problem when local businesses are burdened with taxes and rules not being enforced on foreign competitors. Besides loss of taxes, Airbnb rental issues have included illegal subletting, violation of condominium codes, dumping of expenses, insurance violations, and squatter problems,” he said.
Mr. Keim, who is the Cayman-based director of Nasdaq-listed O2Micro International and has served on the executive committee of three large strata corporations, acknowledged home sharing sites could increase tourism. But he said they lacked transparency and allowed some renters to escape paying taxes.
“We also need to be sensitive to the fact that allowing U.S. companies unrestricted access to our market can result in lost local employment while enhancing U.S. jobs and tax coffers at our expense. In fact, the U.S. heavily taxes tourism business including taxation of Airbnb company profits, taxation of Airbnb employee incomes, property taxes, and rental income taxes,” he added.