Short-term rentals in Middletown, explained properly.

Section 27C00 (Ordinance 2024-21, passed October 21, 2024) sets three standards on top of the Zoning Code's other special-use-permit requirements: the use must fully comply with Chapter 98 of the Town Code as amended; the owner must give the Zoning Enforcement Officer an affidavit that the use complies with the Article 4 restrictions; and the grant may carry any condition allowed under Section 904. We haven't reviewed the Article 4 definition, Section 904, the special-use-permit procedure, application fees or timelines, or the rules for non-residential districts.

Sections 98.06 and 98.07. Each unit is also subject to an annual inspection by the Building Official or designee to determine its occupancy limit (Section 98.04(B)).

Section 98.08 sets the fee, and the owner pays it when filing the registration form with the registrar on or before December 1 each year (Section 98.07). The fee wording was last amended by Ordinance 2021-20, passed November 15, 2021. We haven't reviewed the fee for the special use permit that the Zoning Code requires.

Section 98.12 makes the local representative the initial contact for questions or complaints about the rental and requires a response within two hours to make sure the use complies with Chapter 98 and the Town's parking, noise, disturbance and nuisance ordinances and state law on alcohol and illegal drugs. Failing to respond to Middletown Police Department inquiries in a timely manner more than twice during the annual permit term is a violation of the chapter. The owner may change the representative by filing an amended permit application with the new name, address and telephone number, and failing to notify the Town of a change is a violation. The definition says a local representative may, but need not, also be the property manager.

Section 98.09(A): the limit is set at the annual inspection, counts only individuals at least 12 years old, and fractions are rounded down. A bedroom must be lawfully created and code-compliant. Exceeding the limit is a violation subject to a fine of up to $1,000 per day, and the lease and the posted notice must say so.

Section 98.09(B). The occupancy figure comes from Section 98.09(A). The number and location of onsite parking spaces must also appear in the posted notice (Section 98.10(C)).

Section 98.10(A) and (B). The lease must say the legal occupancy is limited by town ordinance to the number of persons aged 12 or older on the attached permit, with a fine of up to $1,000 per day for exceeding it, and that subletting makes the tenant subject to the chapter, including registering the sublease at Town Hall. Letting a non-tenant stay one or more nights for money or anything of value counts as a sublease. The owner may add a clause restricting or prohibiting subleasing. Tenants are responsible for violations by themselves and their guests, and a tenant charged with an occupancy, noise or peace violation may be subject to immediate eviction (Section 98.11).

Section 98.10(C). Printed form notices are available at the registrar's office. The notice must also say that failing to keep to the occupancy limit is a violation subject to a fine of up to $1,000 per day.

Section 98.99. Pre-trial pleas may be accepted at the initial hearing unless the person cited seeks a trial before the judge. We haven't reviewed any penalties for operating without the special use permit, since the Zoning Code's enforcement provisions haven't been reviewed.

Section 42-63.1-14, as amended by Public Law 2024, chapter 437 (enacted June 29, 2024; effective January 30, 2025), requires the registration. The state registration records the owner's principal place of business (or an agent or property manager if the owner is outside the state), the owner's or manager's phone number and email address, the rental's address, the number of rooms for rent, whether the registrant rents or owns, and the intended use (entire space, private room or shared space). Registration must be completed before a platform lists the property. The registration number is valid for the year in which it is assigned, and renewals fall due on the anniversary of the original registration. If a listed property is not duly registered after the annual registration period expires, the platform must remove the listing within 14 days of notification from the Department. An owner who lists an unregistered property faces a civil fine of $250 for the first 30 days of noncompliance, $500 for 31 to 60 days and $1,000 for more than 60 days. A platform that offers a rental without requiring the current registration number and expiration date to be displayed faces a civil fine of $250 per day per violation, each listing counting separately. Platforms must also report their Rhode Island listings to the Department quarterly. The Department may charge a registration fee and writes the rules that enforce the section; the fee amount and the rules haven't been reviewed yet.

Section 42-63.1-14(a) also bars a city or town from prohibiting that platform from giving a person or entity the means to rent, pay for or reserve the residential unit. The platform must comply with the room-reseller requirements of sections 44-18-7.3(b)(4)(i) and 44-18-36.1 for the bar to apply, and the Division of Taxation, at a city's or town's request, confirms whether a hosting platform is registered under section 44-18-7.3(b)(4)(i). The section as amended by Public Law 2024, chapter 437 took effect January 30, 2025.

Section 44-18-36.1(a) imposes the 5% hotel tax on the total consideration charged for occupancy of any space furnished by any hotel, travel package, or room reseller or reseller as defined in section 44-18-7.3(b). The same subsection says a house, condominium or other resident dwelling is exempt from the 5% tax under that subsection if it is rented in its entirety. The tax is in addition to any sales tax and is administered and collected by the Division of Taxation. Subsection (b) levies a local hotel tax of 1% on the total consideration charged for occupancy of any space furnished by any hotel, and subsection (c) says the Division distributes the proceeds at least quarterly to the city or town where the space is located. Whether the local 1% tax reaches a whole-home short-term rental depends on how "hotel" is defined in section 42-63.1-2; the saved copy of Public Law 2024, chapter 437 does not show which words were added or removed, so this page does not rely on it. The statute text we reviewed lists amendments through Public Law 2019, chapter 88, and we have not confirmed whether later acts changed these rates, so confirm current rates with the Division of Taxation. We haven't reviewed how these taxes combine on a booking, so no combined total is given.

Section 44-18-7.3(b)(4)(i) says a room reseller or reseller (a person with authority from or through a hotel to reserve or arrange occupancy, where the occupant pays all or part of the rental and other fees to the reseller) must register with, and collect and pay to, the tax administrator the sales and use and hotel taxes, calculated on the rental and other fees the occupant pays the reseller less the fees the reseller pays the hotel. The tax must be stated and charged separately from the rental and other fees. No person may act as a room reseller for any hotel in the state unless the tax administrator has issued a permit under section 44-19-1. Section 42-63.1-14(a) requires a hosting platform to comply with the room-reseller requirements of sections 44-18-7.3(b)(4)(i) and 44-18-36.1 for its bar on local prohibitions to apply. Section 44-18-7.3 was last amended by Public Law 2025, chapter 278, effective October 1, 2025. We haven't reviewed which platforms collect the taxes on a given stay or what an owner's own filing duty is when listing through a platform; check with the platform and the Division of Taxation.