Lexington's Short-Term Rentals: The Rules That Matter

Every city handles short-term rentals a little differently. In Lexington, Kentucky, there are 10 distinct rules that residents and property owners should be aware of. Some are stricter than what neighboring cities enforce, and others are more relaxed. Here is what you need to know.

Short-Term Rental Parking Rules

Lexington-Fayette short-term rental applicants must submit a site plan showing exactly how many vehicles the property can legally park without spilling onto the street, sidewalk, alley or right-of-way: a Sec. 13-77 condition for the special fee license.

Key details: Required document: Site plan + floor plan (§13-77). Must show: Vehicles legally parked on property. Prohibited: Encroaching street, sidewalk, alley, ROW. Reviewing office: Division of Revenue (Sec. 13-77).

Submitting an application with an incomplete or false parking site plan gives the Director grounds under Sec. 13-77(h) to refuse to issue or renew the special fee license. Operating a short-term rental with guest vehicles encroaching onto the street, sidewalk, alley, or right-of-way in a way that departs from the licensed site plan is noncompliance subject to the Sec. 13-81 civil penalty schedule, which escalates from $125.00 for a first offense to $1,000.00 for a fourth or later offense, with each day of continued violation a separate offense.

Insurance Requirements

Every Lexington-Fayette short-term rental license application must include proof of at least $1,000,000 in general liability insurance per occurrence, and Sec. 13-77 requires that coverage to stay continuously in force for as long as the license is active.

Key details: Minimum coverage: $1,000,000 per occurrence (§13-77). Coverage type: General liability insurance. Duration: Must stay in force while licensed. Proof required: Certificate of insurance with application.

Failing to maintain the required $1,000,000.00 general liability coverage is noncompliance with an applicable law or regulation under Sec. 13-77(h), giving the Director grounds to refuse to issue or renew, or to revoke, the special fee license. General article violations also draw Sec. 13-81 civil penalties on an escalating $125.00 to $1,000.00 schedule by offense number, with each day a violation continues treated as a separate offense.

Occupancy Limits

A Lexington short-term rental may hold only the maximum number of occupants set in its conditional use permit, or otherwise the applicable Zoning Ordinance limit for that zone. Any permanent resident present during a stay counts toward that cap, and the limit must be posted inside the unit and stated in every advertisement.

Key details: Occupancy source: Conditional use permit, or Zoning Ordinance by zone. Resident counted: Any permanent resident present during a stay. Posting duty: Max occupancy posted inside the unit. Advertising duty: Max occupancy stated in every ad. 1st offense fine: $125.

Exceeding the posted occupancy limit, or advertising the rental without the required occupancy-limit language, is a violation under §§ 13-76 through 13-82, subject to civil penalties from $125 for a first offense up to $1,000 for a fourth or later offense under § 13-81. Two such violations within one license term expose the licensee to revocation of the special fees license under § 13-77.

Noise Rules

Lexington short-term rental licensees may not host weddings, parties or other private events between 11:00 p.m. and 7:00 a.m., and commercial special events are banned at any hour. Private events held within those hours, or any event exceeding the unit's maximum occupancy, put the licensee's registration at risk.

Key details: Private-event curfew: No parties 11:00 p.m.–7:00 a.m.. Commercial special events: Prohibited at all times. Event size cap: Cannot exceed max occupancy. 1st offense fine: $125. Revocation risk: 2 violations in one license term.

A violation of the § 13-79 event-timing rule draws the same escalating civil penalty schedule as other short-term rental violations: $125 for a first offense, $250 for a second, $500 for a third, and $1,000 for a fourth or later offense under § 13-81, with each day of a continuing violation after notice treated as a separate offense. Two such violations in one license term can also trigger revocation of the special fees license under § 13-77.

Repeat Violator Strikes

The Lexington-Fayette Urban County Government revokes a short-term rental's special fees license once the licensee or the property is found in violation of the STR ordinance two or more times within one license term. A revoked license bars reapplication for that same dwelling unit for a full year, on top of escalating civil fines.

Key details: Revocation trigger: 2+ violations in one license term. Reapplication bar: 1 year, tied to the dwelling unit. 1st offense fine: $125. 4th+ offense fine: $1,000. Enforcing agency: Division of Revenue citation officers.

A second violation of sections 13-76 through 13-82 within one license term triggers revocation by the Director, on top of escalating civil fines: $125 for a first offense, $250 for a second, $500 for a third, and $1,000 for a fourth or later offense, with each day a violation continues after notice counting as a separate offense. A revoked license bars reapplication for that dwelling unit for one year.

Compared to other cities, Lexington takes a harder line on repeat violator strikes. The enforcement and penalty structure reflects that.

Primary-Residence-Only Rule

Lexington-Fayette limits an individual to one primary residence, and Sec. 13-76 requires 275 days of actual occupancy a year before a property counts as that primary residence for short-term rental purposes: the threshold hosted STR status depends on.

Key details: Occupancy threshold: Minimum 275 days/year (§13-76). Residence limit: One primary residence per person. Proof required: ID + tax/bank/vehicle/utility document. False claim penalty: License denial or revocation (§13-77(h)).

A false claim of primary-residence status on a Sec. 13-77 license application is grounds for the Director to refuse or revoke the license under Sec. 13-77(h) for an intentional or knowing false statement on a material matter. General article violations also carry Sec. 13-81 civil penalties escalating from $125.00 for a first offense up to $1,000.00 for a fourth or later offense, with each continuing day a separate offense.

Host Presence Rule

A hosted short-term rental in Lexington-Fayette requires the primary resident to keep living on the property while paying guests are there. Sec. 13-76 draws the hosted-versus-un-hosted line entirely on whether the host stays, and both categories still need the Sec. 13-77 special fee license.

Key details: Hosted definition: Primary resident stays during rental (§13-76). Un-hosted trigger: Host absent or not primary residence. Status change effect: License expires automatically (§13-77). First-offense fine: $125.00 (§13-81). Repeat violation: License revocation eligible.

Sec. 13-81 subjects general article violations, including a false hosted/un-hosted designation, to escalating civil penalties of $125.00 for a first offense, $250.00 for a second, $500.00 for a third, and $1,000.00 for a fourth or later offense, with each day a violation continues counted separately. Under Sec. 13-77(h)-(i), the Director may also deny, refuse to renew, or revoke the special fee license, and a licensee found in violation twice or more in one license term faces outright revocation.

Short-Term Rental Permits

No one may own a short-term rental in Lexington-Fayette County without a special fees license from the Division of Revenue. Applicants must supply contact and emergency-contact information, a site and floor plan, proof of $1 million liability insurance, planning approval, and safety affidavits before the license is issued.

Key details: Licensing authority: LFUCG Division of Revenue. Minimum liability insurance: $1,000,000 per occurrence. Emergency contact distance: Within 25 miles of the rental. License expiration: December 31 annually, or on ownership/use change. Penalty for unlicensed operation: $500 per offense.

Operating a short-term rental without the required special fees license violates § 13-77(a) and carries a civil penalty of $500 per offense under § 13-81, imposed by a Division of Revenue citation officer, in addition to any penalty under § 13-15 for failing to obtain a special fees license. Each day the violation continues after notice is a separate offense, and the government may place a lien on the property for unpaid civil fines.

This is not one of those rules that cities tend to ignore. Lexington actively enforces its short-term rental permits requirements.

Host Platform Liability

Only short-term rentals registered under Lexington's licensing article may be advertised for stays under 30 days on a hosting platform. Every such ad must display the rental's local registration number and state its maximum occupant count, plus a warning that guests cannot bring more people than that limit allows.

Key details: Ad eligibility: Only rentals registered under § 13-77. Required in every ad: Local registration number. Also required: Max occupancy + no-overcrowding language. Platform tax duty: Collect & remit transient room tax, § 13-78. Enforcement target: Licensee, via § 13-81 civil penalties.

An advertisement that omits the required registration number or occupancy-limit language, or that advertises an unregistered short-term rental, violates § 13-80 and is enforced against the licensee under § 13-81's civil penalty schedule, starting at $125 for a first offense and rising to $1,000 for a fourth or later offense, with each day of a continuing violation after notice a separate offense.

The rules around host platform liability in Lexington lean permissive, but that does not mean anything goes.

Taxes & Fees

Hosting platforms operating in Lexington-Fayette County must collect and remit transient room tax on every booking they process; if a platform does not collect it, the licensee owner must collect and pay it directly. Licensees separately owe occupational license fees on the net profits their short-term rentals earn.

Key details: Primary tax collector: Hosting platform, per booking. Fallback collector: Licensee, if platform doesn't collect. Governing tax section: § 2-172, applied via § 13-78. Additional fee: Occupational license fee on net profits. Penalty basis: Article I, Ch. 13 tax/fee nonpayment penalty.

Any person who violates § 13-78's tax-collection duty 'shall be subject to the penalty provided in article I of this chapter for failure to pay the applicable tax or occupational license fee,' per § 13-81. That penalty runs separately from the $125–$1,000 escalating civil fines that apply to other short-term rental violations, and each day of continued nonpayment after notice constitutes an additional offense.

The Bottom Line

Lexington is tougher than many cities when it comes to short-term rentals. Out of the 10 rules covered here, 2 are rated strict. If you are a homeowner, renter, or business owner in Lexington, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.

Keep in mind that Lexington can amend these rules at any council meeting. For the most current version of any rule mentioned here, check the specific ordinance page, where we track updates as they happen.