Overview: Are Short-Term Rentals Allowed in Highlands, NJ?

Yes, short-term rentals are permitted in Highlands, NJ, but under strict regulatory framework. The Borough of Highlands explicitly allows short-term rentals through Ordinance O-18-08, enacted in 2018, which establishes a comprehensive permitting and regulatory system. However, these rentals are limited to specific property types and must comply with owner-occupancy requirements, making this a highly regulated market suitable for serious investors willing to navigate complex compliance requirements.

How to Start a Short-Term Rental Business in Highlands, NJ

Step-by-Step Process

1. Property Eligibility Verification

   • Confirm your property qualifies under Section 4-14.3(b) of the ordinance
   • Verify owner-occupancy requirements are met
   • Check for any zoning restrictions or HOA prohibitions

2. Initial Application Submission

   • Submit short-term rental permit application to the Municipal Clerk
   • Pay required application fee
   • Include all required documentation (see Required Documents section)

3. Inspection Schedule Setup

   • Prepare for quarterly fire safety and property maintenance inspections
   • Ensure property meets all building and safety codes

4. Certificate of Occupancy Application

   • Apply concurrently with STR permit for rental Certificate of Occupancy
   • Complete required inspections and approvals

5. Advertising Compliance

   • Obtain STR permit before any advertising
   • Include permit number in all advertisements
   • Ensure compliance with MLS listing requirements

Required Documents, Permits, Licenses, and Guidelines

Primary Permits and Licenses

Short-Term Rental Permit

• Issued by Municipal Clerk
• Annual permit required
• Fee: $400 (≤5 rentals/month) or $500 (≥6 rentals/month)
• Non-transferable and property-specific

Rental Certificate of Occupancy

• Required for STR operation
• Issued concurrent with STR permit
• Annual renewal required

Required Documentation for Application

1. Owner Identification and Residency Proof

   • Driver's license or State ID confirming principal residence
   • Property deed or ownership proof
   • Sworn acknowledgment of principal residence status

2. Insurance and Financial

   • General liability insurance minimum $1,000,000
   • Proof of current property ownership
   • Tax and sewer payment clearance

3. Property Details and Compliance

   • Parking space inventory (on-street and off-street)
   • Zoning Compliance Certificate
   • Condominium association approval letter (if applicable)

4. Management and Contact Information

   • Responsible party contact details (24/7 availability required)
   • Emergency contact information
   • Acknowledgment of duties and responsibilities

5. Property Manager Certification

   • Written certification from responsible party
   • Agreement to perform all specified duties
   • 24/7 availability commitment

Inspection Requirements

Mandatory Quarterly Inspections

• Fire safety compliance verification
• Property maintenance code adherence
• Ongoing compliance monitoring
• Additional inspections as required for Certificate of Occupancy

Specific Regulations for Short-Term Rentals

Property Eligibility Restrictions

Permitted Property Types:

1. Condominium units (if bylaws permit STR and owner identifies as principal residence)
2. Single-family residences (owner identifies as principal residence)
3. One unit in two-family dwelling (other unit owner-occupied as principal residence)
4. One unit in multi-family dwelling (other unit owner-occupied as principal residence)
5. One room in single-family dwelling (common kitchen/bathroom, owner-occupied)

Prohibited Properties:

• Condominiums with STR prohibitions in bylaws/master deed
• Single-family homes where owner doesn't identify property as principal residence
• Properties where owner doesn't occupy another unit in same building
• Boarding/rooming houses, dormitories, foster homes, assisted living facilities
• Properties with pending code violations or unpaid taxes

Operational Requirements

Length of Stay Restrictions:

• Minimum rental period: 3 consecutive days
• Maximum rental period: 30 consecutive days
• Annual cap: 90 total days per calendar year
• Single rental contract per dwelling unit at any time

Occupancy and Age Requirements:

• Minimum renter age: 21 years old
• Primary occupant must be over 21 and actually occupy the property
• Guest restrictions: 1 vehicle per 4 occupants
• No signage identifying property as STR

Advertising and Marketing Requirements:

• STR permit required before any advertising
• Permit number must appear in all advertisements
• Applies to print, digital, internet platforms, and MLS listings
• MLS listings must include permit number

Safety and Posted Information Requirements:

• Owner contact information posted prominently
• Responsible party 24/7 contact information posted
• Emergency contact numbers (Police, Fire, Code Enforcement, Building Dept.)
• Maximum parking capacity posted
• Trash/recycling pickup information and rules
• Copy of STR ordinance posted
• Bond procedure information posted
• Violation notification posted

Enforcement and Penalties

Fines and Violations:

• Violations subject to fines up to $2,000 per violation per day
• Applies to STRP owner, transient occupants, and responsible party
• Failure to obtain permit before advertising constitutes violation

Complaint and Revocation Process:

• Two or more substantiated complaints may result in permit revocation
• Three or more vehicle-related complaints may trigger revocation
• One-year waiting period for new permit after revocation

Bond Requirements for Problem Properties:

• Property with two substantiated complaints may require $500-$5,000 bond
• Bond remains in effect for four years
• Transfer of ownership doesn't void bond requirement
• Subject to forfeiture for future violations

Contact Information for Local Authority

Primary Contact:

• Municipal Clerk's Office
  • Phone: (732) 872-1224
  • Address: 151 Navesink Ave., Highlands, NJ 07732
  • Hours: Monday-Friday, 8:30am - 4:30pm
  • Fax: (732) 872-0670

Key Departments:

• Borough Administrator

  • Address appeals and administrative matters
  • Contact through Municipal Clerk's Office

• Code Enforcement Department

  • Phone: (732) 872-1224
  • Contact: Through Municipal Clerk's Office
  • Responsibility: Property maintenance violations

• Building Department

  • Phone: (732) 872-1224
  • Contact: Through Municipal Clerk's Office
  • Responsibility: Construction permits and inspections

• Fire Prevention

  • Phone: (732) 872-1224
  • Contact: Through Municipal Clerk's Office
  • Responsibility: Fire safety inspections

• Police Department

  • Phone: (732) 872-1224 (Non-emergency)
  • Emergency: 911
  • Responsibility: Complaint handling and enforcement

State-Level Regulations (NJ)

While Highlands has specific local ordinances, New Jersey state regulations that may apply include:

Health and Safety Codes:

• New Jersey Hotel and Multiple Dwelling Law compliance where applicable
• Fire safety regulations for lodging establishments
• Property maintenance codes

Tax Implications:

• New Jersey gross income tax considerations for rental income
• Potential sales tax implications for transient accommodations
• Local property tax obligations

Consumer Protection:

• Truth-in-Renting regulations
• Security deposit requirements (where applicable)
• Fair housing law compliance

Zoning and Land Use:

• Municipal zoning compliance
• Land use board approvals where required

Source Links

• Highlands Borough STR Ordinance O-18-08: https://highlandsnj.gov/wp-content/uploads/2020/10/O-18-08-Short-Term-Rentals.pdf
• Highlands Borough STR Application Page: https://highlandsnj.gov/short-term-rental-application/
• Highlands Borough Code: https://ecode360.com/HI4100

Important Note: This guide is based on current regulations as of the provided content. Investors should verify current requirements and consult with local authorities before making investment decisions, as regulations may change and additional requirements may apply based on specific property circumstances.