Buying a home that is advertised as a turnkey short-term rental in Sedona can look like an easy win. The reality is the permit fine print can make or break your numbers on day one. You want a smooth handoff, predictable cash flow, and no surprises after closing. In this guide, you will learn exactly what transfers, what does not, and how to verify a listing’s claims before you commit. Let’s dive in.
Sedona STR rules in plain English
Sedona allows short-term rentals under Arizona state law that limits how cities can regulate them. State rules block local bans but allow narrowly tailored health, safety, and nuisance regulations. You can read the state framework in Arizona’s SB1350.
Inside Sedona city limits, Chapter 5.25 of the municipal code controls how STRs operate. The city requires an annual permit, sets operating standards, and enforces neighbor protections, posting rules, and penalties. Start with the city’s Short-Term Rentals page for current steps, documents, and fee updates.
The permit details sellers forget to mention
Permits are per unit and do not transfer
A Sedona STR permit is required for each rentable dwelling unit and it does not transfer at sale. A buyer must apply for a new permit in their own name. Sellers must also remove STR advertising at closing. See the city’s rules on permit requirements and nontransferability.
What your application must include
Your permit application needs the rental address, owner or entity information, an emergency contact, and proof of an Arizona Transaction Privilege Tax license. The city will not process your permit without a valid TPT number. Details appear in Sedona Code 5.25.030 and the city’s STR page.
Neighbor notice, postings, and 24/7 contact
You must designate a 24/7 emergency contact, notify nearby single-family properties in writing, post the permit on-site, and include the permit number in all ads. These are continuing duties, not a one-time step. Review neighbor notification and posting rules.
Background checks before check-in
At least 24 hours before arrival, you or your designee must run a sex-offender background check on the booking guest or retain proof that the platform did it. Keep the record for 12 months. Owners remain responsible if a platform fails to screen. See Sedona Code 5.25.100.
Insurance and building safety
You must maintain at least $500,000 in liability coverage per rental and ensure building permits and safety approvals are in place. The city outlines these owner responsibilities on its STR page.
Use limits and no special events
Sedona limits STRs to defined dwelling units and prohibits non-residential uses or unpermitted events like weddings or retreats. Check the prohibited uses and definitions before you underwrite event income.
Fees, renewals, and penalties
Sedona charges a nonrefundable annual permit fee, which the city has updated to $210 effective January 10, 2025. Permits must be renewed on time to avoid penalties. Repeated or serious violations can trigger escalating fines or suspensions. See the city’s STR page and the penalties section.
Due diligence checklist before you close
- Confirm jurisdiction. Verify the parcel is inside Sedona city limits using the city’s GIS maps. City rules apply only inside city limits.
- Verify a current permit. Get the seller’s permit copies and confirm numbers with the city. Permits do not transfer, so plan your own application timeline. See 5.25.030.
- Check every rentable unit. If there is a main house plus casita, each unit needs its own permit and must display a permit number in ads. See 5.25.030.
- Pull enforcement history. Ask the seller and the city about complaints, violations, fines, or suspensions that could affect renewal. The penalties framework is in 5.25.120.
- Confirm insurance and building approvals. Ask for liability insurance certificates and building permit or occupancy records. Use the city’s STR guide as a checklist.
- Verify TPT licensing and taxes. Confirm an active TPT license and review tax filings. Marketplace collection does not replace your filing duties. See the AZ DOR TPT guidance.
- Audit the ads. Make sure every live listing displays the permit number and matches the permitted units. Misadvertising can trigger enforcement. See 5.25.030.
- Review guest screening workflow. Confirm how background checks are performed, documented, and stored for 12 months. See 5.25.100.
- Confirm HOA or CC&R limits. Private covenants can restrict or prohibit STRs even if the city allows them. Get documents and enforcement history from the HOA.
- Check occupancy, parking, and trash plans. Align house rules with Sedona’s neighborhood standards to avoid repeat violations. The city’s STR page outlines owner responsibilities.
- Tighten contract language. Add contingencies for permit verification, ad removal at closing, your permit application window, holdbacks for unresolved violations, and clear tax representations.
Common pitfalls that cost buyers money
- Assuming the permit conveys. A Sedona STR permit does not transfer, so you can lose operating ability right after closing if you do not plan your new permit. See 5.25.030.
- Multi-unit and unusual property types. Definitions around what counts as a separate dwelling unit can be complex. Monitor policy changes and, for context, note that local rules are evolving under state law. Start with the city’s STR page and state SB1350.
- Underestimating operational chores. Background checks, neighbor notices, 24/7 contact readiness, and record retention are real daily tasks. See 5.25.060 and 5.25.100.
- Tax exposure. Even if a platform collects some taxes, you remain responsible for proper licensing and filings. Confirm with the AZ DOR.
- Changing rules. Sedona continues to refine its STR code. Check the city’s current guidance before you rely on listing claims.
Who to contact and next steps
- City of Sedona Short-Term Rentals: start with the STR landing page. STR hotline: 928-203-5110. STR Specialist: Teresah Arthur, [email protected], 928-203-5198.
- Sedona Municipal Code: permits, notices, background checks, penalties are in Chapter 5.25. Key sections include 5.25.030, 5.25.060, 5.25.100, and 5.25.120.
- Jurisdiction check: verify city limits with Sedona GIS maps. If outside city limits, start with the Coconino County vacation rental FAQ.
- Taxes and licensing: confirm TPT licensing and filing rules through the Arizona Department of Revenue.
Want help pressure-testing a Sedona STR and structuring financing that fits your goals? Connect with Denise McManus for an integrated plan that covers due diligence, strategy, and creative loan options.
FAQs
What happens to the STR permit when a Sedona home sells?
- The permit does not transfer to the buyer. You must apply for a new permit and the seller must remove STR ads at closing according to Sedona Code 5.25.030.
Do I need a separate permit for a casita or ADU in Sedona?
- Yes. Each rentable dwelling unit needs its own permit, and each listing must display that permit number under 5.25.030.
What guest screening does Sedona require for STRs?
- You must conduct a sex-offender background check on the booking guest at least 24 hours before check-in or keep proof the platform did it, and retain records for 12 months per 5.25.100.
How much is Sedona’s STR permit fee and how often do I renew?
- The city lists a $210 annual fee effective January 10, 2025, and permits must be renewed each year. See the city’s STR page.
How do I confirm a property is inside Sedona city limits?
- Use the city’s GIS maps to confirm jurisdiction. Rules differ if the parcel is in unincorporated county areas.
Can an HOA block STRs even if Sedona allows them?
- Yes. HOA covenants and deed restrictions are private rules that can limit or prohibit STRs regardless of city permits. Always review the HOA documents and enforcement history.
Are weddings or retreats allowed at Sedona STRs?
- No. Non-residential uses and unpermitted special events are prohibited under Sedona Code 5.25.020.
What are the penalties for STR violations in Sedona?
- Fines escalate for repeat violations and the city can suspend permits for up to 12 months, as outlined in 5.25.120.
If a platform collects taxes for my listing, am I covered?
- Not entirely. You still need an active TPT license and remain responsible for proper filings. Check the AZ DOR guidance.
