If short-term rentals are part of your Hermosa Beach purchase plan, start with the parcel’s Coastal Zone status. The city’s framework permits that use within the Coastal Zone and prohibits it outside the zone, subject to confirming the ordinance’s adoption and effective date.
A Coastal Zone address still leaves registration, licensing, tax and private-document questions to resolve. An existing listing does not establish what you must do as the next owner.
This is general information, not legal or tax advice.
Can you run a short-term rental at the property?
Under Chapter 3.32, a short-term rental is a dwelling unit, or a portion of one, rented for 30 consecutive calendar days or less. The first purchase check is whether the specific parcel lies inside the Coastal Zone. Ask the city for that confirmation.
The ordinance text sets no cap on the number of short-term rentals or on how many one owner may hold. That does not remove the operating requirements.
There is also conflicting city guidance. The city’s Short-Term Rentals web page, read October 20, 2026, still describes rentals allowed in pilot-program commercial zones outside the Coastal Zone. The ordinance repeals that pilot and prohibits rentals outside the Coastal Zone; the page appears to predate the ordinance, so confirm the discrepancy with the city.
What changed, and when does it apply?
According to the city’s August 25 staff report, on April 23, 2026, the Los Angeles County Superior Court entered a judgment finding the Coastal Zone ban unenforceable because the city had not obtained California Coastal Commission approval.
Per the city, short-term rentals may operate within the Coastal Zone unless and until it adopts additional Coastal Zone rules and obtains any required Coastal Commission approval. Easy Reader reported that the council voted 4 to 1 in May not to appeal.
The council selected Option 1 on August 25: permit rentals in the Coastal Zone, prohibit them outside it and establish an operating framework.
The September 8 staff report placed Ordinance No. 26-1502 on that meeting’s consent calendar for second reading and adoption. The city filed its exemption notice on September 15. The ordinance takes effect 30 days after adoption. Confirm adoption, the effective date and the current text with the City Clerk.
What registration and operating requirements apply?
Chapter 5.84 in the ordinance text requires each Coastal Zone operator to register through the city’s online platform. Registration must include:
- Property owner contact information.
- A local emergency contact available 24 hours a day, seven days a week, who can respond to complaints, nuisances and Police Department requests.
- An affirmation that the safety equipment listed on the city’s registration portal is present and readily available in the unit.
The operator must also obtain and maintain a business license and pay transient occupancy tax under Chapter 3.32. Registration, licensing and tax compliance are separate requirements.
Hosting platforms must display the local license number and the city’s transient occupancy tax certification in each listing. They must also report rental addresses when the city requests them.
Nuisances are enforced under Chapter 8.28. Violations of Chapter 5.84 are punishable by administrative citation under Chapter 1.10. The chapter does not specify occupancy limits, parking rules, insurance requirements or fee amounts.
What does the tax chapter require?
Chapter 3.32 sets transient occupancy tax at 14 cents on every dollar of rent, payable by each transient. Operators must register with the Tax Administrator within 30 days after starting business and post the transient occupancy registration certificate in the unit.
The certificate is for tax purposes only. The city states that it does not constitute a land-use permit or other regulatory authorization. A posted certificate therefore does not settle whether the proposed use is permitted at that property.
Tax returns and remittance are required quarterly, or for shorter periods the city sets. For a purchase, distinguish this tax registration from Chapter 5.84’s online registration and the business license. The ordinance assigns obligations to each; completing one does not answer the others.
What should buyers know about tax clearance?
Before buying a property operated as a short-term rental, a buyer may request a tax clearance certificate in writing from the city’s Tax Administrator. Section 3.32.125 provides for a certificate stating any tax, penalties and interest owed.
The city has 90 days to issue the certificate or audit. A buyer who does not obtain one, or receives one showing tax due and fails to hold back enough in escrow, is liable for unpaid tax. If the city does not comply with the request, the buyer is not liable for tax incurred before the purchase.
Delinquent tax, penalties and collection costs can become a recorded lien on the property. Discuss the request, timing and any escrow withholding with escrow and the city. This is a purchase issue even when the property already has a listing or tax certificate.
What else should you check before buying?
The ordinance text does not say whether an existing registration transfers. Confirm how online registration and the business license work for a new owner, including what must be completed for your operation.
Check any HOA or condominium CC&Rs for rental restrictions. City permission does not resolve what those documents allow. The California HOA disclosure guide can accompany that review.
If financing includes a DSCR loan, use the California DSCR loan guide alongside your review of the property’s permitted use and operating obligations.
You can also read another coastal city’s rules. Keep the Hermosa Beach ordinance and parcel confirmation as the basis for this purchase.
Could the rules change after you buy?
The council shortened the staff-recommended one-year evaluation to a six-month review. Staff’s listed measures are registrations, reported rental revenue, transient occupancy tax collected and complaints to Community Development and Police.
The August staff report cites County Assessor data showing about 5,404 residential units in the Coastal Zone. Staff estimated an average of 65 short-term rentals collecting revenue each month.
Those figures measure different things. They do not establish permission for a particular property or predict its results. The planned review also means buyers should not assume the framework will remain unchanged. Further Coastal Zone rules would need any required Coastal Commission approval.
The short version
Confirm the parcel’s Coastal Zone status and the ordinance’s adoption and effective date. Review registration, the local emergency contact, safety affirmation, business licensing and tax requirements. For a previously operated rental, discuss tax clearance with escrow and the city, and check private rental restrictions.
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Common questions
Can you operate a short-term rental anywhere in Hermosa Beach?
No. Ordinance No. 26-1502 prohibits short-term rentals outside the Coastal Zone. Confirm adoption, the effective date and the current text with the City Clerk.
How do you check whether a home is in the Coastal Zone?
Ask the city to confirm whether the specific parcel is inside the Coastal Zone.
Does an existing registration transfer when you buy?
The ordinance text does not say whether a registration transfers. Ask how registration and the business license work for a new owner, and discuss a tax clearance certificate with escrow and the city.
Can an HOA restrict short-term rentals?
Check the HOA or condominium CC&Rs for rental restrictions rather than relying solely on city permission.
