Bar Harbor Considers Stricter Oversight of Owner-Occupied Short-Term Rentals
Some proposed changes would apply to all STRs
The Bar Harbor Story is generously sponsored by Edward Jones Financial Advisor: Elise N. Frank.
BAR HARBOR—Changes are potentially afoot that have some Bar Harbor residents worried about their ability to continue to use their home as a short-term rental.
Those changes involve the primary residency standard for one of the town’s types of short-term rentals as well as how the town regulates all short-term rentals.
“We’re just buttoning up (Chapter) 174, which is kind of the licensing portion of the short-term rental program,” Planning Director Michele Gagnon said of the order during the May 20 town council meeting.
The two linked measures and the ballot vote in June could influence how short-term rentals that are someone’s primary residence (VR-1) are registered and enhance the town’s ability to enforce rules that are already in place for both types of short-term rental.
An upcoming town vote in June could give voters the opportunity to remove the current primary residency standard of proof from chapter 125 and shift it to chapter 174, which is where these proposed changes would reside.
The first measure was detailed in the town council’s agenda as order 19.
“Order 19, schedule a public hearing on amendment to Chapter 174, Short-Term Rental to strengthen primary residence verification for VR-1 registrations, improve enforcement tools, and enhance overall compliance,” it read on the council’s agenda.
Order 20 on the council is housekeeping, Gagnon said.
That second order read, “Order 20, schedule a public hearing on amendment to Chapter 174, Short-Term Rental, to ensure consistency with a proposed Land Use Ordinance amendment.”
Town Councilor Earl Brechlin said it was a good change.
However, some Bar Harbor residents worry that potential changes to the town’s short-term rental program are more than just the housekeeping and could impact them.
Some residents are concerned that some of the proposed changes are akin to spying and violations of property owner’s rights to privacy.
The changes stem from some perceived bad actors who may (or may not) have been skirting a town system that caps the number of short-term rentals in homes that are not primary residences (VR-2). It’s estimated that approximately 10-12% of VR-1s could be involved.
The proposed changes would allow the town’s code enforcement officer (CEO) to determine if a property qualifies as someone’s primary residence.
To do that, the CEO will review the documents submitted by an owner “and any other relevant evidence, including the owner’s conduct or pattern of behavior such as, but not limited to, time spent at the property, usage patterns of utilities and services, mail delivery records, and occupancy record, that reasonably supports the conclusion that the property is used as the owner’s primary residence.”
THE STATE OF THE SHORT-TERMS
As of December 2024, there were 662 short-term rentals of both types. This is a decrease from the 2022 total of 681. During that time, the amount of VR-2s (non-owner occupied) decreased from 522 to 470. Primary residences (VR-1s) increased from 159 to 192.
The cap on VR-2 registrations is based on the current number of residences in Bar Harbor and is a 9% cap. That cap is meant to be met via attrition as licenses are dropped, failed to be renewed, and/or homes are sold. That number the town is trying to meet for those VR-2s is 296 registrations.
VR-1 Registration Requirement Changes
Currently, the burden of proof for a resident to show that a residence is a property owner’s primary residence is as follows according to the town’s municipal code.
Chapter 125 is the town’s Land Use Ordinance which is part of the municipal code. Chapter 174 is another part of the municipal code and it is “Short-Term Rental Registration.”
The pieces of governing the town’s policy on short-term registrations are spread across these two sections of the town’s municipal code. One is within voter control (Chapter 125) and one isn’t (Chapter 174). The town council can change that section without a town vote.
Residents can currently show that primary residency proof with a tax return or a driver’s license.
Chapter 174-5-I reads, “To register as a VR-1, the property owner shall attest and provide reasonable documentation demonstrating that the subject property is the owner's primary residence such as tax returns and driver's license.”
Property owners can only rent out their primary residence (or a portion of it or a second dwelling unit on the same parcel) if they prove that it is their primary residence.
Chapter 125-69-Y(1)(b)[1] reads in part, “A property owner is only eligible for a VR-1 registration if that property owner can demonstrate that the dwelling unit or another dwelling unit, on the lot where the VR-1 is located, qualifies as their primary residence.”
The current definition of a primary residence, according to Bar Harbor’s land use ordinance, Chapter 125-109, is “the location where the owner resides most of the year. The property owner uses this address as their legal address for tax returns, driver's license, and/or voter registration card.”
That all would potentially change.
Instead, people would have to show multiple items to prove that their home is their primary residence. That would include sworn attestation and three items of reasonable documentation (valid ID from Maine, income tax return, vehicle registration, recent utility bill).
The proposed new Chapter 174-5-I is as follows.
“To qualify for VR-1 registration, all individuals listed on the deed must demonstrate that the property is their primary residence. This burden of proof rest solely with the owner to clearly establish primary residence. This registration requirement shall be satisfied by:
“(a) Submission of a sworn attestation by all owners affirming that the property is their primary residence and that they do not claim any other property as their primary residence for any legal purpose; and
“(b) Submission of reasonable documentation demonstrating the property to be registered as a VR-1 is the primary residence of the owner(s). Reasonable documentation shall include at least three of the following items, each listing the property address to be registered as a VR1:
“[1] A valid Maine driver’s license or other State of Maine-issued photo identification; [2] Most recent federal or state income tax return; [3] Vehicle registration; [4] A utility bill issued within the last three months.”
The proposed new Chapter 125-109, Definitions is as follows. The strikethroughs are language to be removed and everything following the word “resides” is new language.
“The location where the owner resides for
most of the yearmore than 183 days of the year and is listed as their legal address for tax/and or governmental identification purposes.The property owner uses this address as their legal address for tax returns, driver’s license, and/or voter registration. An individual may only have one primary residence at a time. The determination of primary residence for the purpose of proving eligibility for a VR-1 registration shall be made in accordance with Chapter 174 Short-Term Rental Registration. “
Chapter 125-69-Y(1)(b)[1] is not proposed to change.
Potential Short-Term Rental Inspection Changes and Enforcement Procedures
Currently, short-term rentals must have a life safety inspection before an initial STR permit is issued and then every three years after.
That language is in Chapter 174-8 and has changed by one paragraph. The new proposed language (new section “B”) also allows the code enforcement officer to “conduct random audits, defined as unannounced site inspections conducted between rental periods when the unit is not occupied by renters, to verify ongoing compliance with all applicable standard and regulations.”
This wasn’t expressly discussed during the town council meeting last week where the council moved the proposed changes to a public hearing.
The proposal would also allow the CEO to deny, suspend, or revoke an STR registration if documents submitted are false, misleading or just incomplete; if the rental is violating any state, local, or federal rules, regulations, or ordinances; if the rental could endanger “or has the potential to endanger, the health, safety, or general welfare of the occupants, neighboring residents, or the broader community.”
It also says that the CEO must give written notice prior to these actions and explain the violation and offer “an opportunity to respond or correct the issue.”
These proposed new sections to Chapter 174-9 would become the new section “A” placing them before and outside of the historical section “A” (which will become section “B”) which includes town council involvement, giving the appearance of placing the discretion solely in the hands of the CEO for the violations listed in the new section “A.”
“It’s a good step in the right direction,” Gagnon said during the council meeting.
Bar Harbor Code Enforcement Officer Mike Gurtler said that it isn’t perfect. “This just increases the number of things that they would have to do to prove that (residency).”
A Municipality Using State Tax Rules as a Requirement For a Permit
In Chapter 174-5, “Requirements to operate short-term rentals,” there is a new proposed section, “J,” which reads, “The applicant for a STR renewal registration must demonstrate that the property is registered with the Maine Revenue Services for the collection and remittance of Maine sales tax on taxable rentals.”
Short-term rentals will have to be registered with the Maine Revenue Services, Gagnon said at the May 20 meeting.
There is a requirement that “all Maine taxpayers that engage in short-term rentals are required to register with Maine Revenue Services,” according to Director of Communications for the Department of Administrative and Financial Services Sharon Huntley. This is shown in Maine Statutes Title 36, part 3, chapter 211, section 1754-B.
Additionally, Huntley said, “Maine municipalities have what is known as ‘Home Rule Authority,’ which means they generally have the authority to self-govern in all areas where the State of Maine or the federal government has not passed laws that would restrict them.”
Resident Concerns
Multiple residents have reached out to the Bar Harbor Story with concerns.
“May be noncompliant” vs. actual data
The most basic of concerns is that they believe the town has put forth no data to show that VR-1 permit holders or applicants are abusing the registration requirements to obtain or maintain a VR-1 permit.
However, a January 2025 survey of VR-1 registrations worried town officials that approximately 12% of the registrations might be noncompliant with primary residency requirements. That would be 23 of 192 registrations. This information is included in the May 20 council order.
That potential noncompliance, the order reads, raises “concerns about enforcement and eligibility integrity.”
Changes could harm the very people VR-1s are intended to help
There are concerns that the proposed language actually places legitimate permit holders in danger of losing their permit. The town has long stated that the primary reason for VR-1 permits is so that year-round and often times long-term residents can help sustain the ability to live in Bar Harbor while expenses of all types, including property taxes and assessed home values, continue to rise.
Some permit holders are fixed income residents who depend on this additional income. Some are of an older age and as an example of a detrimental requirement, it is common, for purposes of legal protection, to have more than one person on a deed. That additional person or persons may not reside at the residence but the resident and probable homeowner wants that person to have a firmly established legal right to the property upon death.
The worries extend to circumstances such as providing three forms of verification to show primary residence, which as proposed could be a valid state issued ID, a federal or state income tax return, vehicle registration, or a recent utility bill.
Some people do not own vehicles for personal, medical, or financial reasons. Some deed holders might not have the utility bill in their name, but in their spouse’s. They would be unable to provide those three ways to show they are a primary resident.
Inequality of standards for protecting renters of long-term and short-term rentals
Last week, Gurtler’s office reviewed and processed approximately 300 Long-Term Rental (LTR) forms. According to the town manager’s weekly update, Gurtler’s office also “assisted several late filers with completing their Short-Term Rental (STR) registrations, some of whom needed to settle outstanding utility balances beforehand.”
The long-term rental task force was “appointed by the town council in December 2021. In August of 2022, the task force presented findings and recommendations to the town council, leading to the adoption of Chapter 130, a new Long-Term Rental Housing Ordinance.”
The task force then paused until January of 2024 to await registration data so that it could formulate recommendations to the council on an inspection component of Chapter 130. The task force met for the last time on July 25, 2024, and one of the recommendations that it decided to make to the council was that all long-term rental units should be conducted on at least a three-year basis for basic life safety standards.
There are approximately 500 registered long-term rentals. Since the task force’s last meeting, the council has not heard its recommendations nor has any sort of life safety inspection been instituted. According to Gurtler, there have been no inspections of any long-term rentals other than “a few” that were based on tenant complaints. Other than those few, the only long-term rentals that have been inspected are those also registered as short-term rentals.
This Saturday is the final day for short-term-rental registration. Prior rentals have to be reregistered each year by May 31.
Do the actions match the stated purpose
The stated purpose of chapter 174 is, “to ensure that the quality of short-term rentals (herein ‘STR’) within the Town of Bar Harbor is adequate for protecting the health, safety and welfare of occupants of STRs and of the community.”
Concerns here are great and varied but one example would be the apparent power given to the CEO to “deny, suspend, or revoke an STR registration” if the STR is operated “in a manner that endangers, or has the potential to endanger, the health, safety, or general welfare of the occupants, neighboring residents, or the broader community.”
One recent action that could be linked to this broad power (as an item of concern) is a decision by the town council at its May 6 meeting to deny a special amusement permit for Siam Orchid after a number of Kennebec Street residents made comment during public hearing that they were worried about the potential noise level.
The town has a noise ordinance specific to special amusement permits that allows the town to take away a permit after violations have occurred. This was, however, a new permit. There are multiple live music venues currently on that street.
Residents with STRs are concerned that “neighboring residents” complaints or worries that aren’t substantiated could lead to the loss of a STR permit.
Invasion of privacy and confidentiality
The town states that a tax return will satisfy one of the three proof of residency requirements and does not make that option mandatory. However, if for some reason a home owner’s utilities are not in their name, or they don’t have a vehicle, the town is forcing a registrant to provide federally protected private information.
By giving the CEO the ability to establish residency “by time spent at the property, usage patterns of utilities and services, mail delivery records, and occupancy record,” some residents feel that the town is empowering the CEO to spy on them either in person or via a third party by polling neighbors.
Additionally, those who do not support the changes feel that monitoring mail delivery, water and power usage, and tracking a person’s daily patterns of living turns the CEO into an investigator and may in fact wander into territory protected by the Fourth Amendment protections against unreasonable searches. However, the CEO often investigates complaints and reports of violations.
Moving definition of primary residence into Chapter 174
Currently, the definition of primary residence is stated in Chapter 125-109 and reads, “The location where the owner resides most of the year. The property owner uses this address as their legal address for tax returns, driver's license, and/or voter registration card.”
Chapter 125-69Y currently reads, “A property owner is only eligible for a VR-1 registration if that property owner can demonstrate that the dwelling unit or another dwelling unit, on the lot where the VR-1 is located, qualifies as their primary residence.”
And, currently, Chapter 174-5I reads, “To register as a VR-1, the property owner shall attest and provide reasonable documentation demonstrating that the subject property is the owner's primary residence such as tax returns and driver's license.”
As proposed, the definition of primary residence will stay in Chapter 125-109 but will have multiple changes to include the addition of “the determination of primary residence for the purpose of proving eligibility for a VR-1 registration shall be made in accordance with Chapter 174 Short-Term Rental Registration.”
In addition, there will be an entirely new section, proposed as Chapter 125—69Y(4) that reads, “To operate a dwelling unit, or portion thereof, as a VR-1, the property owner must prove that the VR-1 is the legal address of the property owner’s primary residence, in accordance with Chapter 174 Short-Term Rental Registration.”
Concerns are that by adding this additional language and placing the very specific requirements for registering a VR-1 in Chapter 174 takes away from the democratic process and voter control. If the town council isn’t happy with the results of the changes, it can simply keep changing the requirements at will to meet the council’s desires without voter approval.
Those determination standards have always been in Chapter 174 but are proposed to be greatly enhanced and the additional proposed wording in Chapter 125 solidifies control by the council and not the voters.
NEXT STEPS:
What has to happen for these changes to go through:
Town voters will have the opportunity to approve, or not, the changes to the Land Use Ordinance Amendments (Chapter 125) at the June 10 ballot election.
The public can express their opinions on the proposed Chapter 174 changes at the town council’s June 17 meeting and/or via written comment to the councilors
The council will then decide to approve, or not, the Chapter 174 amendments.
All written comment is considered part of the public record and can be requested by the press and other citizens.
The Bar Harbor Story is generously sponsored by Peekytoe Provisions.
LINKS TO LEARN MORE
Contact all town council members and the town manager simultaneously by using Bar Harbor Town Council email.
You can sign up for automatic agenda updates online.
The Chapter 125 amendments above are on the ballot for the June 10, 2025, election.
The Chapter 174 amendments above are scheduled for public hearing on June 17, 2025.
SHORT-TERM RENTAL INFORMATION VIA THE TOWN
Additional Forms & Information:
Top 10 Reasons for Failing a Short-Term rental inspection
Chapter 174: Short-Term Rental Regulations
Short-Term Rentals - Land Use Ordinance
Guide to Septic Systems - Maine DEP
Disclaimer: Our homes are registered as short-term rentals. Shaun Farrar also currently serves on the town’s warrant committee.
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