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.
Show All Answers
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.
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.
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.
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.
No, the Limited Home Rental exception only applies to your entire home.
No, you cannot live in your house while it is being leased as Limited Home Rental.
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.
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
The California Occupancy limits allow no more than two occupants per bedroom.
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.
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.
Please contact HdL at 949-528-3797.
Darrell Hill, Code Enforcement Supervisor, at 949-461-3465.