Townsend, TN short-term rental permit

What Townsend asks of you

• No unit may be listed, booked or occupied as a short-term rental until the owner holds the permit plus a city business license.^[3]

• The annual application fee of $250.00 is non-refundable. A renewal must be filed no later than fourteen business days ahead of expiration.^[3]

• The local contact is available 24 hours a day, seven days a week, with authority to take corrective action.^[3]

• Off-street parking must provide at least one space per bedroom. Guests may not use street parking unless other city regulations permit it.^[3]

• Smoke alarms meeting UL 217 go inside each sleeping room, outside each sleeping area and on every level, basements included.^[3]

• Carbon monoxide detectors meeting UL 2034 must sit within fifteen feet of all bedrooms. Every floor needs a working fire extinguisher in a readily accessible spot.^[3]

• Evacuation plans hang on each level and mark a clear "You Are Here" point. Each chimney needs a professional cleaning within the past year, unless it is out of use and secured against guest access.^[3]

• The application includes a site plan showing parking spaces and the maximum number of overnight vehicles. A floor plan shows sleeping areas, bed sizes and exit routes.^[3]

• The owner signs a written indemnification agreement holding the City of Townsend harmless from claims tied to the rental.^[3]

• The permit cannot be transferred. A change of ownership is among the grounds the form lists for suspension or revocation, as is inactivity beyond thirty months.^[3]

• City staff may inspect the premises when you apply. Later visits can be periodic or follow a complaint.^[3]

• Hosts log each complaint with the corrective action taken. The city can ask to see that record at any time.^[3]

• Ordinance 360-26-1C, adopted on second reading May 19, 2026, says short-term rental units may not operate in the R1-E zoning district. It allows them in the B-1 district.^[4]

• On July 21, 2026, the mayor reported a request to remove short-term rental use from all residentially zoned areas. The Planning Commission had suggested a joint workshop with the commissioners to discuss it.^[4]

• Title 5 of the municipal code levies a 3% tax on the consideration charged for a stay. Its definition of a hotel names short-term rental units.^[7]

• The city's notice to property owners says stays of 30 consecutive days or more by the same guest are exempt from the tax.^[5]

• The city's tax FAQ words the exemption differently. It says stays exceeding 30 consecutive days are generally exempt.^[6]

What Tennessee asks wherever you host

These rules apply at this address whatever the city decides.

• Tennessee's definition covers a residential dwelling rented for a fee, in whole or in part, for under thirty continuous days. Hotels fall outside it, as do bed-and-breakfast establishments.^[1]

• A local ordinance passed after a property began operating as a short-term rental does not reach that property. The rules in place when it started keep governing it. A sale or other transfer ends that protection. Thirty continuous months without rental use end it as well. Three separate breaches of a generally applicable local law have the same effect.^[1]

• A city with a permit or application process may suspend a property's use while it lacks a permit. That power holds only when the city's requirements are reasonable.^[1]