What You Need to Know About the New Short-Term Rental Rules in Ouray County (2025 Update)
If you're thinking about buying or selling a home in unincorporated Ouray County, there's an important change you need to know about: the County's updated Short-Term Rental (STR) ordinance went into effect in January 2025. These new rules have major implications for how properties can (and cannot) be used as vacation rentals.
This post breaks down the most important highlights so you can make informed decisions before listing your home or purchasing a property with STR potential.
🔍 Licenses Do Not Transfer Upon Sale
One of the biggest changes in the new ordinance is this:
STR licenses no longer transfer with the sale of a property.
That means if you're buying a home that currently operates as a short-term rental, you will not inherit the rental license. The moment the property transfers ownership, the license becomes void. A new owner must apply for a license—and under the new ordinance, that's no simple process.
🏡 Three Types of STR Permits — and Why They Matter
The ordinance created three distinct permit types:
Type 1 Permit – Off-Site Owners
This type allows owners who don’t live on the property to rent out the entire primary dwelling unit (PDU) or an accessory dwelling unit (ADU)—but not both.
Important:
Type 1 permits are currently not available, and the waitlist has over 20 names—some dating back five years. The ordinance also requires a 50/50 balance between Type 1 and Type 2 permits, which means many existing Type 1 permits would have to expire before any new ones could be issued. For this reason, it is not realistic to expect a Type 1 permit to become available anytime soon.
Type 2 Permit – On-Site Owner or Occupant
Allows the owner or resident to live on-site and rent out either the PDU or ADU, but not both. Proof of on-site residency is required.
Type 3 Permit – On-Site Owner or Occupant (Portion of Home Only)
Allows a resident to rent out a portion of the main dwelling (e.g., a bedroom or basement), but not the entire home or ADU. Renting out any part of the ADU under this permit is prohibited.
⚠️ Why This Matters to Buyers and Sellers
If you're a buyer hoping to purchase a property for short-term rental income, you must do your homework. Unless you're planning to live on-site full-time and meet the requirements for a Type 2 or 3 permit, you likely won’t qualify—especially not for an off-site rental.
If you're a seller, it’s equally important to avoid marketing your property as “STR eligible” unless you're absolutely sure it qualifies under the new rules. Misleading claims can create confusion, wasted time, and disappointed buyers.
📄 Read the Full Ordinance
The full STR ordinance can be viewed here:
👉 Ouray County STR Ordinance – January 2025
✅ Bottom Line
The updated rules represent a significant shift in how short-term rentals are managed in unincorporated Ouray County. Whether you’re buying or selling, it’s essential to understand these restrictions so you can plan accordingly—and avoid surprises after closing.
Have questions? Let’s connect. I’m happy to walk you through how these changes may affect your real estate goals in Ouray County.
