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1. What is a Short-Term Rental?

A Short-Term Rental dwelling unit is short-term lodging leased for compensation under a single oral or written agreement. A Short-Term Rental is a non-home owner occupied residence that is leased as a vacation rental.  The City does allow you to lease your own home for a limited period of time as a Limited Home Rental.

2. Why is the City regulating Short-Term Rentals?

The City received various complaints regarding short-term rentals in residential neighborhoods.  Impacts from these uses include excessive noise, traffic, and parking impacts. The Lake Forest Municipal Code (“LFMC”) prohibits transitory uses in residential districts.

3. What happens if I rent a property as a Short-Term Rental?

Operating a Short-Term Rental is illegal.  You will be subject to Code Enforcement action and are liable for the unpaid Transient-Occupancy Tax (“TOT”) due for each night your property is used as a Short-Term Rental.  In addition, you will be required to file a tax return with the City’s Tax Administrator and are also liable for tax penalties and interest. The City may also file a lien against the property to collect any unpaid taxes and penalties.

4. What is a Limited Home Rental?

A Limited Home Rental is the rental of your entire home for up to 3 periods of fewer than 30 consecutive days in a calendar year. A property you do not reside in does not qualify as a Limited Home Rental.  This exception ensures that a property owner may rent out their personal home while the owner is away for a short period of time on a limited basis each year.

5. Can I rent a room in my home as a Limited Home Rental?

No, the Limited Home Rental exception only applies to your entire home.

6. Can I live in the home while I lease it as a Limited Home Rental?

No, you cannot live in your house while it is being leased as Limited Home Rental.

7. Does the City allow me to rent my primary home for less than 30-days?

The City allows up to three periods of fewer than 30 consecutive days in a calendar year where you primary residences may be rented.  However, if you do not reside at your home, the Limited Home Rental exception does not apply to you or your property. You are legally responsible for the use of your property.

8. Do I need register and pay Transient Occupancy Taxes for a Limited Home Rental?

Yes, a Limited Home Rental is defined as a hotel under the City’s laws. The Lake Forest Municipal Code requires you pay TOT and file a tax return with the City’s Tax Administrator.  TOT is paid through Hinderliter De Llamas and Associates (“HdL”) a company hired by the City to administer tax related services.  For your convenience, TOT may be remitted online:  TOT Payment Website

9. How many guests can stay in my Limited Home Rental?

The California Occupancy limits allow no more than two occupants per bedroom.

10. Does the City’s Ordinance prevent me from leasing my home to a long-term tenant?

The City’s Ordinance does not apply to a long-term rental, where an entire home or a portion of a home is rented for more than 30 days at a time (e.g., month-to-month or year-long leases).  A long-term rental is permitted as long as there is not more than one verbal or written agreement for the property being rented.  A property with more than one rental agreement is prohibited by the City.

11. Do I pay taxes if I am renting my home or a portion of my home to a long-term tenant?

No, you do not need to pay TOT to lease your property to a long-term tenant.  However, you are required to continue paying property taxes.

12. Are there other penalties associated with operating a Short-Term Rental?

Each violation of the City’s Municipal Code constitutes a criminal misdemeanor violation. Each misdemeanor carries a penalty of a fine of up to $1,000 (per violation) or jail time for up to six months, or both. Please note that each day that this unlawful activity occurs is a separate violation.

13. Who do I contact with questions about paying TOT?

Please contact HdL at 949-528-3797.

14. Who do I contact with questions about the Short-Term Rental Ordinance?

Darrell Hill, Code Enforcement Supervisor, at 949-461-3465.