AZ SB1205

Cities and towns are prohibited from banning vacation rentals or short-term rentals but may regulate them for public health, safety, zoning, and nuisance purposes using the same standards applied to other residential properties.

Cities and towns may require owners to obtain local permits or licenses (fee capped at $250), provide emergency contact information, maintain $500,000 liability insurance, and notify adjacent property owners before offering rentals.

Cities and towns may limit the number of vacation rentals through ordinances setting maximum permits citywide, requiring specific distances between rentals, or capping rentals in specified areas.

Permit suspension periods up to 12 months are allowed for three verified violations in 12 months or for serious violations including felonies, serious injuries, sex offender housing, or unauthorized special events; civil penalties range from $500 to $3,500 per violation.

Existing permit holders in good standing are exempt from newly adopted limitation ordinances unless the city determines the ordinance is necessary for public health and safety or the owner's permit is revoked or suspended.