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SB1261 - 572R - I Ver
REFERENCE TITLE:
short-term rentals; vacation rentals; occupancy
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SB 1261
Introduced by
Senator
Kavanagh
AN
ACT
amending sections 9-500.39 and 11-269.17,
arizona revised statutes; relating to vacation rentals and short-term
rentals.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 9-500.39, Arizona Revised
Statutes, is amended to read:
START_STATUTE
9-500.39.
Regulation of vacation rentals and short-term rentals;
civil penalties; transaction privilege tax license suspension; definitions
A. A city or town may not prohibit vacation rentals
or short-term rentals.
B. A city or town may not restrict the use of or
regulate vacation rentals or short-term rentals based on their
classification, use or occupancy except as provided in this section. A city or
town may regulate vacation rentals or short-term rentals as follows:
1. To protect the public's health and safety,
including rules and regulations related to fire and building codes, health and
sanitation, transportation or traffic control and solid or hazardous waste and
pollution control, if the city or town demonstrates that the rule or regulation
is for the primary purpose of protecting the public's health and safety.
2. To adopt and enforce use and zoning ordinances,
including ordinances related to noise, protection of welfare, property
maintenance and other nuisance issues
, if the ordinance is
applied in the same manner as other property classified under sections 42-12003
and 42-12004
.
3. To limit or prohibit the use of a vacation rental
or short-term rental for the purposes of housing sex offenders, operating
or maintaining a sober living home, selling illegal drugs, liquor control or
pornography, obscenity, nude or topless dancing and other adult-oriented
businesses.
4. To require the owner of a vacation rental or
short-term rental to provide the city or town with emergency contact
information for the owner or the owner's designee who is responsible for
responding to complaints or emergencies in a timely manner in person if
required by public safety personnel, over the
phone
telephone
or by email at any time of day before offering for
rent or renting the vacation rental or short-term rental. In
addition to any other penalty imposed pursuant to this section, the city or
town may impose a civil penalty of up to $1,000 against the owner for every
thirty days the owner fails to provide contact information as prescribed by
this paragraph. The city or town shall provide thirty days' notice
to the owner before imposing the initial civil penalty.
5. To require the owner of a vacation rental or
short-term rental to obtain and maintain a local regulatory permit or
license.� As a condition of issuance of a permit or license, the application
for the permit or license may require an applicant to provide only the
following:
(a) The name, address, telephone number and email
address for the owner or owner's agent.
(b) The address of the vacation rental or short-term
rental.
(c) Proof of compliance with section 42-5005.
(d) Contact information required pursuant to
paragraph 4 of this subsection.
(e) Acknowledgment of an agreement to comply with
all applicable laws, regulations and ordinances.
(f) A fee not to exceed the actual cost of issuing
the permit or license or $250, whichever is less.
6. To require, before offering a vacation rental or
short-term rental for rent for the first time, the owner or the owner's
designee of a vacation rental or short-term rental to notify all single-family
residential properties adjacent to and directly and diagonally across the
street from the vacation rental or short-term rental. Notice shall
be deemed sufficient in a multifamily residential building if given to
residents on the same building floor. A city or town may require
additional notification pursuant to this paragraph if the contact information
previously provided changes. Notification provided in compliance
with this paragraph shall include the permit or license number if required by
the city or town, the address of the vacation rental or short-term rental
and the information required pursuant to paragraph 4 of this
subsection. The owner or the owner's designee shall demonstrate
compliance with this paragraph by providing the city or town with an
attestation of notification compliance that consists of the following
information:
(a) The permit or license number of the vacation
rental or short-term rental, if required by the city or town.
(b) The address of each property notified.
(c) A description of the manner in which the owner
or owner's designee chose to provide notification to each property subject to
notification.
(d) The name and contact information of the person
attesting to compliance with this paragraph.
7. To require the owner or owner's designee of a
vacation rental or short-term rental to display the local regulatory
permit number or license number, if any, on each advertisement for a vacation
rental or short-term rental that the owner or owner's designee
maintains.� A city or town that does not require a local regulatory permit or
license may require the owner or owner's designee of a vacation rental or short-term
rental to display the transaction privilege tax license number required by
section 42-5042 on each advertisement for a vacation rental or short-term
rental that the owner or owner's designee maintains.
8. To require the vacation rental or short-term
rental to maintain liability insurance appropriate to cover the vacation rental
or short-term rental in the aggregate of at least $500,000 or to
advertise and offer each vacation rental or short-term rental through an
online lodging marketplace that provides equal or greater coverage.
9. To require the owner of a vacation rental or
short-term rental to reside on the property if the property contains an
accessory dwelling unit and if a certificate of occupancy, certificate of
completion or similar final approval for the accessory dwelling unit was issued
by the municipality on or after September 14, 2024.� This paragraph does not
apply to an owner of a vacation rental or short-term rental if the
property contains an accessory dwelling unit and the certificate of completion,
the certificate of occupancy or a similar final approval for the accessory
dwelling unit was issued on or before September 13, 2024.
10. To restrict the maximum number of
occupants that are allowed in a vacation rental or short-term rental to
the lesser of the following:
(
a
) The
occupancy limit that is established by the city or town.
(
b
) Not more
than two occupants per bedroom, up to four bedrooms, plus two additional adults
per one thousand square feet of livable space that is in excess of three
thousand square feet of livable space of the vacation rental or short-term
rental.
C. A city or town that requires a local regulatory
permit or license pursuant to this section shall issue or deny the permit or
license within seven business days
of receipt of
after receiving
the information required by subsection B,
paragraph 5 of this section and otherwise in accordance with section 9-835,
except that a city or town may deny issuance of a permit or license only for
any of the following:
1. Failure to provide the information required by
subsection B, paragraph 5, subdivisions (a) through (e) of this section.
2. Failure to pay the required permit or license
fee.
3. At the time of application the owner has a
suspended permit or license for the same vacation rental or short-term
rental.
4. The applicant provides false information.
5. The owner or owner's designee of a vacation
rental or short-term rental is a registered sex offender or has been
convicted of any felony offense that resulted in death or serious physical
injury or any felony use of a deadly weapon within the past five years.
D. A city or town that requires a local regulatory
permit or license pursuant to this section shall adopt an ordinance to allow
the city or town to initiate an administrative process to suspend a local
regulatory permit or license for a period of up to twelve months for the
following verified violations associated with a property:
1.
Three
two
verified
violations within a
twelve-month
twenty-four-month
period
, not including any verified violation based on an
aesthetic, solid waste disposal or vehicle parking violation that is not also a
that involve
serious
threat
threats
to public health and safety.
2. Three verified violations within a
twenty-four-month period that involve solid waste disposal or vehicle
parking violations.
2.
3.
One
verified violation that results in or constitutes any of the following:
(a) A felony offense committed at or in the vicinity
of a vacation rental or short-term rental by the vacation rental or short-term
rental owner or owner's designee.
(b) A serious physical injury or wrongful death at
or related to a vacation rental or short-term rental resulting from the
knowing, intentional or reckless conduct of the vacation rental or short-term
rental owner or owner's designee.
(c) An owner or owner's designee knowingly or
intentionally housing a sex offender, allowing offenses related to adult-oriented
businesses, sexual offenses or prostitution, or operating or maintaining a
sober living home, in violation of a regulation or ordinance adopted pursuant
to subsection B, paragraph 3 of this section.
(d) An owner or owner's designee knowingly or
intentionally allowing the use of a vacation rental or short-term rental
for a special event that would otherwise require a permit or license pursuant
to a city or town ordinance or a state law or rule or for a retail, restaurant,
banquet space or other similar use.
(
e
) A violation
of a building code that presents a potential threat to public health or safety
that is related to constructing, modifying or altering a vacation rental or short-term
rental without a required building permit or failing to remedy an unsafe or
unsanitary condition.
3.
4.
Notwithstanding
paragraphs 1 and 2 of this subsection, any attempted or completed felony
offense
,
arising from the occupancy or use of a
vacation rental or short-term rental
,
that
results in a death
,
or actual or attempted serious
physical injury
,
shall be grounds for judicial
relief in the form of a suspension of the property's use as a vacation rental
or short-term rental for
a period of time that shall not
exceed
not more than
twelve months.
E. A city or town that requires sex offender
background checks on a vacation rental or short-term rental guest shall
waive the requirement if an online lodging marketplace performs a sex offender
background check of the booking guest.
F. Notwithstanding any other law, a
city or town may impose a civil penalty of the following amounts against an
owner of a vacation rental or short-term rental if the owner receives one
or more verified violations related to the same vacation rental or short-term
rental property within the same twelve-month period:
1. Up to $500 or up to an amount equal
to one night's rent for the vacation rental or short-term rental as
advertised, whichever is greater, for the first verified violation.
2. Up to $1,000 or up to an amount
equal to two nights' rent for the vacation rental or short-term rental as
advertised, whichever is greater, for the second verified violation.
3. Up to $3,500 or up to an amount
equal to three nights' rent for the vacation rental or short-term rental
as advertised, whichever is greater, for a third and any subsequent verified
violation.
G.
f.
A
vacation rental or short-term rental that fails to apply for a local
regulatory permit or license in accordance with subsection B, paragraph 5 of
this section
,
within thirty days
of
the
after the city or town makes such a
local
regulatory permit or license application process
being made
available
by the city or town issuing such permits or licenses,
must cease operations.
In addition to any civil
penalties imposed pursuant to subsection F of this section,
A city or
town may impose a civil penalty of up to $1,000 per month against the owner if
the owner or owner's designee fails to apply for a regulatory permit or license
within thirty days after receiving written notice of the failure to comply with
subsection B, paragraph 5 of this section.
H.
G.
If
multiple verified violations arise out of the same response to an incident at a
vacation rental or short-term rental, those verified violations are
considered one verified violation for the purpose of
assessing
civil penalties or
suspending the regulatory permit or license of the
owner pursuant to this section.
I.
H.
If
the owner of a vacation rental or short-term rental has provided contact
information to a city or town pursuant to subsection B, paragraph 4 of this
section and if the city or town issues a citation for a violation of the city's
or town's applicable laws, regulations or ordinances or a state law that
occurred on the owner's vacation rental or short-term rental property,
the city or town shall make a reasonable attempt to notify the owner or the
owner's designee of the citation within seven business days after the citation
is issued using the contact information provided pursuant to subsection B,
paragraph 4 of this section.� If the owner of a vacation rental or short-term
rental has not provided contact information pursuant to subsection B, paragraph
4 of this section, the city or town is not required to provide such notice.
J.
I.
This
section does not exempt an owner of a residential rental property, as defined
in section 33-1901, from maintaining with the assessor of the county in
which the property is located information required under title 33, chapter 17,
article 1.
K.
J.
A
vacation rental or short-term rental may not be used for nonresidential
uses, including for a special event that would otherwise require a permit or
license pursuant to a city or town ordinance or a state law or rule or for a
retail, restaurant, banquet space or other similar use.
K. The owner of a vacation rental or
short-term rental may not advertise a vacation rental or short-term
rental that has an occupancy of more than the maximum occupancy limit that has
been established by the city or town.� The city or town may impose a civil
penalty for each day the advertisement for the vacation rental or short-term
rental is in violation of this subsection.
L. For the purposes of this section:
1. "Accessory dwelling unit" has the same
meaning prescribed in section 9-461.18.
2. "Online lodging marketplace" has the
same meaning prescribed in section 42-5076.
3. "Transient" has the same meaning
prescribed in section 42-5070.
4. "Vacation rental" or "short-term
rental":
(a) Means any individually or collectively owned
single-family or one-to-four-family house or dwelling
unit or any unit or group of units in a condominium or cooperative that is also
a transient public lodging establishment or owner-occupied residential
home offered for transient use if the accommodations are not classified for
property taxation under section 42-12001.�
(b) Does not include a unit that is used for any
nonresidential use, including retail, restaurant, banquet space, event center
or another similar use.
5. "Verified violation" means a finding of
guilt or civil responsibility for violating any state law or local ordinance
relating to a purpose prescribed in subsection B, D
, F
or
K
J
of this section that has been
finally adjudicated.
END_STATUTE
Sec. 2. Section 11-269.17, Arizona Revised
Statutes, is amended to read:
START_STATUTE
11-269.17.
Regulation of vacation rentals and short-term rentals; civil
penalties; transaction privilege tax license suspension; definitions
A. A county may not prohibit vacation rentals or
short-term rentals.
B. A county may not restrict the use of or regulate
vacation rentals or short-term rentals based on their classification, use
or occupancy except as provided in this section. A county may regulate vacation
rentals or short-term rentals within the unincorporated areas of the
county as follows:
1. To protect the public's health and safety,
including rules and regulations related to fire and building codes, health and
sanitation, transportation or traffic control and solid or hazardous waste and
pollution control, if the county demonstrates that the rule or regulation is
for the primary purpose of protecting the public's health and safety.
2. To adopt and enforce use and zoning ordinances,
including ordinances related to noise, protection of welfare, property
maintenance and other nuisance issues
, if the ordinance is
applied in the same manner as other property classified under sections 42-12003
and 42-12004
.
3. To limit or prohibit the use of a vacation rental
or short-term rental for the purposes of housing sex offenders, operating
or maintaining a sober living home, selling illegal drugs, liquor control or
pornography, obscenity, nude or topless dancing and other adult-oriented
businesses.
4. To require the owner of a vacation rental or
short-term rental to provide the county with emergency contact
information for the owner or the owner's designee who is responsible for
responding to complaints or emergencies in a timely manner in person if
required by public safety personnel, over the
phone
telephone
or by email at any time of day before offering for
rent or renting the vacation rental or short-term rental. In
addition to any other penalty imposed pursuant to this section, the county may
impose a civil penalty of up to $1,000 against the owner for every thirty days
the owner fails to provide contact information as prescribed by this
paragraph. The county shall provide thirty days' notice to the owner
before imposing the initial civil penalty.
5. To require the owner of a vacation rental or
short-term rental to obtain and maintain a local regulatory permit or license.�
As a condition of issuance of a permit or license, the application for the
permit or license may require an applicant to provide only the following:
(a) The name, address, telephone number and email
address for the owner or owner's agent.
(b) The address of the vacation rental or short-term
rental.
(c) Proof of compliance with section 42-5005.
(d) Contact information required pursuant to
paragraph 4 of this subsection.
(e) Acknowledgment of an agreement to comply with
all applicable laws, regulations and ordinances.
(f) A fee not to exceed the actual cost of issuing
the permit or license or $250, whichever is less.
6. To require, before offering a vacation rental or
short-term rental for rent for the first time, the owner or the owner's
designee of a vacation rental or short-term rental to notify all single-family
residential properties adjacent to and directly and diagonally across the
street from the vacation rental or short-term rental.� Notice shall be
deemed sufficient in a multifamily residential building if given to residents
on the same building floor.� A county may require additional notification
pursuant to this paragraph if the contact information previously provided
changes. Notification provided in compliance with this paragraph
shall include the permit or license number if required by the county, the
address of the vacation rental or short-term rental and the information
required pursuant to paragraph 4 of this subsection.� The owner or the owner's
designee shall demonstrate compliance with this paragraph by providing the
county with an attestation of notification compliance that consists of the
following information:
(a) The permit or license number of the vacation
rental or short-term rental, if required by the county.
(b) The address of each property notified.
(c) A description of the manner in which the owner
or owner's designee chose to provide notification to each property subject to
notification.
(d) The name and contact information of the person
attesting to compliance with this paragraph.
7. To require the owner or owner's designee of a
vacation rental or short-term rental to display the local regulatory permit
number or license number, if any, on each advertisement for a vacation rental
or short-term rental that the owner or owner's designee maintains.� A
county that does not require a local regulatory permit or license may require
the owner or owner's designee of a vacation rental or short-term rental
to display the transaction privilege tax license number required by section 42-5042
on each advertisement for a vacation rental or short-term rental that the owner
or owner's designee maintains.
8. To require the vacation rental or short-term
rental to maintain liability insurance appropriate to cover the vacation rental
or short-term rental in the aggregate of at least $500,000 or to
advertise and offer each vacation rental or short-term rental through an
online lodging marketplace that provides equal or greater coverage.
9. To require the owner of a vacation rental or
short-term rental to reside on the property if the property contains an
accessory dwelling unit and if a certificate of occupancy, certificate of
completion or similar final approval for the accessory dwelling unit was issued
by the county on or after September 14, 2024.� This paragraph does not apply to
an owner of a vacation rental or short-term rental if the property
contains an accessory dwelling unit and the certificate of completion, the
certificate of occupancy or a similar final approval for the accessory dwelling
unit was issued on or before September 13, 2024.
10. To restrict the maximum number of
occupants that are allowed in a vacation rental or short-term rental to
the lesser of the following:
(
a
) The
occupancy limit that is established by the county.
(
b
) Not more
than two occupants per bedroom, up to four bedrooms, plus two additional adults
per one thousand square feet of livable space that is in excess of three thousand
square feet of livable space of the vacation rental or short-term rental.
C. A county that requires a local regulatory permit
or license pursuant to this section shall issue or deny the permit or license
within seven business days
of receipt of
after receiving
the information required by subsection B, paragraph 5 of
this section and otherwise in accordance with section 11-1602, except
that a county may deny issuance of a permit or license only for any of the
following:
1. Failure to provide the information required by
subsection B, paragraph 5, subdivisions (a) through (e) of this section.
2. Failure to pay the required permit or license
fee.
3. At the time of application the owner has a
suspended permit or license for the same vacation rental or short-term
rental.
4. The applicant provides false information.
5. The owner or owner's designee of a vacation
rental or short-term rental is a registered sex offender or has been
convicted of any felony offense that results in death or serious physical
injury or any felony use of a deadly weapon within the past five years.
D. A county that requires a local regulatory permit
or license pursuant to this section shall adopt an ordinance to allow the
county to initiate an administrative process to suspend a local regulatory
permit or license for a period of up to twelve months for the following
verified violations associated with a property:
1.
Three
TWO
verified
violations within a
twelve-month
TWENTY-FOUR-MONTH
period
, not including any verified violation based on an
aesthetic, solid waste disposal or vehicle parking violation that is not also a
that INVOLVe
serious
threat
threats
to public health or safety.
2. Three verified violations within a
twenty-four-month period that involve solid waste disposal or vehicle
parking violations.
2.
3.
One
verified violation that results in or constitutes any of the following:
(a) A felony offense committed at or in the vicinity
of a vacation rental or short-term rental by the vacation rental or short-term
rental owner or owner's designee.
(b) A serious physical injury or wrongful death at
or related to a vacation rental or short-term rental resulting from the
knowing, intentional or reckless conduct of the vacation rental or short-term
rental owner or owner's designee.
(c) An owner or owner's designee knowingly or
intentionally housing a sex offender, allowing offenses related to
adult-oriented businesses, sexual offenses or prostitution, or operating or
maintaining a sober living home, in violation of regulation or ordinance
adopted pursuant to subsection B, paragraph 3 of this section.
(d) An owner or owner's designee knowingly or
intentionally allowing the use of a vacation rental or short-term rental
for a special event that would otherwise require a permit or license pursuant
to a county ordinance or a state law or rule or for a retail, restaurant,
banquet space or other similar use.
(
e
) A violation
of a building code that presents a potential threat to public health or safety
that is related to constructing, modifying or altering a vacation rental or
short-term rental without a required building permit or failing to remedy
an unsafe or unsanitary condition.
3.
4.
Notwithstanding
paragraphs 1 and 2 of this subsection, any attempted or completed felony
offense
,
arising from the occupancy or use of a
vacation rental or short-term rental
,
that
results in a death
,
or actual or attempted serious
physical injury
,
shall be grounds for judicial
relief in the form of a suspension of the property's use as a vacation rental
or short-term rental for
a period of time that shall not
exceed
not more than
twelve months.
E. A county that requires sex offender background
checks on a vacation rental or short-term rental guest shall waive the
requirement if an online lodging marketplace performs a sex offender background
check of the booking guest.
F. Notwithstanding
any other law, a county may impose a civil penalty of the following amounts
against an owner of a vacation rental or short-term rental if the owner
receives one or more verified violations related to the same vacation rental or
short-term rental property within the same twelve-month period:
1. Up to $500 or up to an amount equal
to one night's rent for the vacation rental or short-term rental as advertised,
whichever is greater, for the first verified violation.
2. Up to $1,000 or up to an amount
equal to two nights' rent for the vacation rental or short-term rental as
advertised, whichever is greater, for the second verified violation.
3. Up to $3,500 or up to an amount
equal to three nights' rent for the vacation rental or short-term rental
as advertised, whichever is greater, for a third and any subsequent verified
violation.
G.
F.
A
vacation rental or short-term rental that fails to apply for a local regulatory
permit or license in accordance with subsection B, paragraph 5 of this section
,
within thirty days
of the
after the county makes such a
local regulatory permit or
license application process
being made
available
by the county issuing such permits or licenses,
must cease
operations.
In addition to any civil penalties imposed
pursuant to subsection F of this section,
A county may impose a civil
penalty of up to $1,000 per month against the owner if the owner or owner's
designee fails to apply for a regulatory permit or license within thirty days
after receiving written notice of the failure to comply with subsection B,
paragraph 5 of this section.
H.
G.
If
multiple verified violations arise out of the same response to an incident at a
vacation rental or short-term rental, those verified violations are
considered one verified violation for the purpose of
assessing
civil penalties or
suspending the regulatory permit or license of the
owner pursuant to this section.
I.
H.
If
the owner of a vacation rental or short-term rental has provided contact
information to a county pursuant to subsection B, paragraph 4 of this section
and if the county issues a citation for a violation of the county's applicable
laws, regulations or ordinances or a state law that occurred on the owner's
vacation rental or short-term rental property, the county shall make a
reasonable attempt to notify the owner or the owner's designee of the citation
within seven business days after the citation is issued using the contact
information provided pursuant to subsection B, paragraph 4 of this section.� If
the owner of a vacation rental or short-term rental has not provided
contact information pursuant to subsection B, paragraph 4 of this section, the
county is not required to provide such notice.
J.
I.
This
section does not exempt an owner of a residential rental property, as defined
in section 33-1901, from maintaining with the assessor of the county in
which the property is located information required under title 33, chapter 17,
article 1.
K.
j.
A
vacation rental or short-term rental may not be used for nonresidential
uses, including for a special event that would otherwise require a permit or
license pursuant to a county ordinance or a state law or rule or for a retail,
restaurant, banquet space or other similar use.
K. The owner of a vacation rental or
short-term rental may not advertise a vacation rental or short-term
rental that has an occupancy of more than the maximum occupancy limit that has
been established by the county. The county may impose a civil
penalty for each day the advertisement for the vacation rental or short-term
rental is in violation of this subsection.
L. For the purposes of this section:
1. "Accessory dwelling unit" has the same
meaning prescribed in section 11-810.01.
2. "Online lodging
marketplace" has the same meaning prescribed in section 42-5076.
3. "Transient" has the same meaning
prescribed in section 42-5070.
4. "Vacation rental" or "short-term
rental":
(a) Means any individually or collectively owned
single-family or one-to-four-family house or dwelling
unit or any unit or group of units in a condominium or cooperative that is also
a transient public lodging establishment or owner-occupied residential
home offered for transient use if the accommodations are not classified for
property taxation under section 42-12001.�
(b) Does not include a unit that is used for any
nonresidential use, including retail, restaurant, banquet space, event center
or another similar use.
5. "Verified violation" means a finding of
guilt or civil responsibility for violating any state law or local ordinance
relating to a purpose prescribed in subsection B, D
, F
or
K
J
of this section that has been
finally adjudicated.
END_STATUTE