Overview

Short-term rentals (less than 30 days) are explicitly allowed in Mountlake Terrace, WA. The city's Residential Rental Business License and Inspection Program (MTMC 15.45) applies to all residential rental housing units, including those used for short-term rentals. There are no city-specific bans or additional restrictions on short-term rentals beyond the standard licensing and inspection requirements for all rental properties.

1. Starting a Short-Term Rental Business in Mountlake Terrace

Process:

1. Acquire Property: Ensure the property is zoned for residential use. Accessory Dwelling Units (ADUs) are exempt from licensing.
2. Obtain License: Apply for a Residential Rental Business License from the Community and Economic Development Department before renting.
3. Complete Inspection: Conduct an inspection by a Qualified Rental Housing Inspector (RHI) to obtain a Certificate of Compliance.
4. Renew Annually: Renew the license before expiration (December 31st) and update inspection certificates as required.
5. Display Requirements: Provide the license and certificate to tenants (single-family) or post in common areas (multifamily).

2. Required Documents, Permits, Licenses, and Guidelines

Key Requirements:

• Residential Rental Business License Application (to the Community & Economic Development Department):
  • List all rental units by address
  • Pay applicable fees
• Certificate of Compliance:
  • Issued by a registered RHI after inspection
  • Valid for 3 years + 90 days
• Qualified Rental Housing Inspector (RHI) Registration (if using private inspector):
  • Annual registration fee
  • Pass RHI exam
  • Possess valid credentials (e.g., ICC Property Maintenance Inspector)
• Business License (City): Requires a separate city business license.
• Display Requirements:
  • Single-family: Provide license/certificate to tenants at lease signing.
  • Multifamily: Post license/certificate in common areas.

3. Specific Regulations (City, County, State)

City of Mountlake Terrace:

• License Scope: Applies to all rental units (long-term and short-term) except:
  • Owner-occupied units
  • ADUs
  • Hotels/motels
  • Government-owned properties
  • Subsidized housing with equivalent inspections
• Inspection Requirements:
  • Sample inspections allowed for buildings with 10+ units (max 20% sampled).
  • City inspects if hazards are reported.
  • Covers minimum standards: sanitation, structural integrity, ventilation, smoke detectors, etc.
• Penalties:
  • $150/day for first 10 days of non-compliance
  • $500/day thereafter
  • $1,000 fine for falsified inspections

State of Washington:

• Residential Landlord-Tenant Act (RCW 59.18): Governs tenant rights, security deposits, and eviction procedures for rentals exceeding 30 days. Short-term rentals (<30 days) fall under hotel/motel regulations (RCW 19.48) and are exempt.
• Sales Tax: STR operators must collect and remit Washington state sales tax (6.5% + local rates).

Snohomish County:

• No additional STR-specific regulations identified in the provided content.

4. Local Authority Contact Information

Primary Contact:

• Department: Community and Economic Development Department
• Phone: (425) 776-1600
• Website: cityofmlt.com
• Business Licenses: Business License Info

Key Contacts for Inspections:

• Qualified Rental Housing Inspectors: Contact the department for a list of registered private RHIs or city inspectors.

5. Source Links

• Mountlake Terrace Municipal Code Chapter 15.45 - Residential Rental Business License
• Mountlake Terrace Business License Information
• WA Residential Landlord-Tenant Act (RCW 59.18)
• WA Hotel/Motel Tax on Short-Term Rentals (RCW 19.48)

Key Notes for STR Investors

• No STR-Specific Rules: The city does not differentiate between short-term and long-term rentals in its licensing/inspection program.
• ADU Advantage: ADUs are fully exempt from licensing, making them ideal for STR use.
• Tax Compliance: Ensure Washington sales tax remittance for rentals <30 days.
• Inspection Costs: Private inspections required unless the city conducts them (no cost to owner).