Some South Bend houses earn a large share of their income on Notre Dame football weekends. When one of them sells after January 1, 2027, the buyer gets the house, the furniture and maybe the booking history. The buyer does not get the city's permission to keep renting it. Indiana law says a short-term rental permit "may not be transferred to the new owner" when a property sells. The new owner has to apply again.
That rule has been in the Indiana Code since 2018. It matters now because South Bend has started using it. On Monday, Sept. 14, 2026, the South Bend Common Council passed two short-term rental bills, each by a 9–0 vote, according to the South Bend Tribune. WNDU reports that both ordinances are expected to take effect Jan. 1, 2027. That is less than three months from today. Anyone buying a rental-ready house near campus this winter is buying into a system that hasn't fully started yet.
Two bills, and which parts of each one pass to a buyer
The two bills do different jobs, and they treat a sale differently.
Bill 52-26 creates the permit program. WNDU reports that every short-term rental property must apply for a city permit, pay a one-time $150 fee, list an emergency contact and meet basic safety and maintenance standards. Owners who don't comply face fines and could lose the permit after repeated violations.
Bill 53-26 is the zoning bill. It adds a special exception path for newly established short-term rentals that are not owner-occupied. Existing operators are treated as legal nonconforming and do not need the exception.
Here is how each piece looks from the buyer's side of a sale:
| Piece of the rental's legal status | What the sources say | What happens at a sale |
|---|---|---|
| City STR permit | One permit per property, issued within 30 days for a complete application | Doesn't transfer. The new owner applies for a new permit |
| Permit term and fees | Permits expire one year after issuance. Initial fee capped at $150. No fee for renewal | Clock and fee start over with the buyer's application |
| Zoning status for an existing non-owner-occupied rental | Treated as legal nonconforming under Bill 53-26 | Not answered in any ordinance text we could read |
| Owner-occupied short-term rental | A permitted use under state law in any district that allows residential use | No special exception needed |
| County innkeeper's tax | Indiana DOR lists St. Joseph County at 8% for stays under 30 days | Applies to whoever operates the rental |
Indiana's code treats a short-term rental's legal standing as belonging to the owner, not the property. The permit shows this most clearly.
Why the permit resets
The state's permit chapter, IC 36-1-24, sets limits on what a city can require, and those limits shape South Bend's program. A city may require one permit per property and must issue a permit within 30 days of a qualifying application. A permit expires one year after it is issued. The fee for an initial permit can't exceed $150, and a city can't charge anything to renew. That lines up with the "one-time" $150 charge WNDU described. Neither WNDU nor the city materials we found explain how South Bend will run annual renewals.
The transfer rule is short:
"If an owner sells all or part of a permitted property, the permit may not be transferred to the new owner. The new owner must submit an application for a new permit."
That is the full text of Section 17 in the 2026 Indiana Code, Title 36, Article 1.
The same chapter ties enforcement history to the owner. If an owner receives three or more citations for ordinance violations at a permitted property within a calendar year, the city may revoke that permit for up to a year, after notice and a hearing. A new permit can't be issued to that owner until any outstanding fines are paid. Renting without a required permit is a Class C infraction, and each unpermitted rental counts as a separate violation. For a buyer, the practical point is timing. Bookings can't legally start until the buyer's own permit is issued, and the state allows the city up to 30 days to issue it.
The open question is the grandfather status
A new permit is a routine filing. The zoning question carries more risk.
WNDU reports that existing non-owner-occupied rentals are "grandfathered in under state law." Citizen Portal's summary of the Sept. 14 meeting says existing operators are treated as legal nonconforming. Both sources say "existing operators" or "existing rentals." Neither one says whether that status stays with the property after the operator sells.
Our research couldn't settle it. The official Bill 53-26 file posted on the city's document portal didn't produce readable text. The part of South Bend's zoning code that governs nonconforming uses was only available as page images. Three things are still unconfirmed:
- How the enacted ordinance defines an "existing" operator, and whether there is a cutoff date or required proof of prior operation
- Whether legal nonconforming status survives a change of ownership
- Whether that status lapses if the rental use stops for a set period, such as a winter with no bookings
The state statute doesn't fill the gap either. IC 36-1-24 excludes units that adopted short-term rental ordinances before January 1, 2018. It doesn't set out a general grandfather right for rentals that were operating before a later local ordinance. Until the city answers these three questions in writing, a buyer can't count on a house's rental history to carry its zoning standing past the sale.
If the house needs a special exception
Suppose a buyer's rental counts as "newly established." It then goes through the special exception process, and the criteria are public. At the Sept. 14 meeting, city attorney Jenna Throw explained that state law lets cities require a special exception for non-owner-occupied short-term rentals but bars them from using it to prohibit or unreasonably restrict those rentals, as summarized by Citizen Portal. She listed four criteria that the Board of Zoning Appeals and council would use to evaluate applications:
- No injury to public health, safety or welfare
- No adverse effect on the value or use of adjacent property
- Consistency with the character of the district
- Compatibility with the City's comprehensive plan
The state ceiling still applies here. A city may require a special exception, special use or variance for a non-owner-occupied short-term rental in a residential district, but it can't apply those rules in a way meant to prohibit or unreasonably restrict covered rentals.
South Bend's 2026 Board of Zoning Appeals schedule runs one hearing a month, with a filing deadline about a week before. This month's deadline was October 5 at noon, and the hearing is today, October 12. Meetings start at 4:00 p.m., and the city encourages early filing to avoid delays. We didn't find the filing fee, the notice requirements, or confirmation of whether the Common Council votes on each application separately.
Owner-occupied rentals avoid this step entirely. Indiana law makes them a permitted residential use in any district that allows residential use, and zoning can't disallow them there. A buyer who plans to live in the house and rent it on home-game weekends needs a permit but no special exception.
Why the council built it this way
The special exception targets a specific part of town. WVPE reported in August that Council member Heidi Beidinger represents the 4th District on the east side, where many homes become temporary hotels on Notre Dame football weekends. She said most owners "do good work" but some absentee owners are causing problems for neighbors. In the same report, community investment director Darryl Scott said the permit records should give the city "some increased visibility into who's operating the short-term rentals and also give us some more tools so we can specifically address repeat offenders."
That focus explains the design. If the permit is tied to the owner, the city's contact information stays current, and a seller's citation record stays with the seller. The cost is that a buyer starts with no permit at all.
The timing pressure
The broader market leaves little time to settle these questions. In August 2026, the median time from listing to pending in St. Joseph County was 12 days, according to the Indiana Association of Realtors. The median sale price that month was $260,000, up 10% from a year earlier. Those are countywide figures, not neighborhood figures. Still, they mean a house with a game-weekend rental history can be under contract before anyone has written to the city to ask whether its zoning status carries over. Questions worth asking before an offer:
- Will the house be owner-occupied, or not? That decides whether a special exception can apply at all.
- Does the seller hold a current permit, and has the seller been cited at this property during the current calendar year?
- What has the city confirmed in writing about whether this property's legal nonconforming status survives a sale?
- Which monthly zoning appeals deadline would the buyer need to meet if a special exception turns out to be required?
- Is the operator registered for the county innkeeper's tax? The Indiana Department of Revenue lists St. Joseph County at 8%, effective 10/01/21, and warns that its posted rates may not reflect later county changes.
Questions buyers ask
Does the seller's booking history count toward the buyer's permit? Under state law, the new owner submits a new application. Nothing in the permit chapter credits a seller's history to the buyer.
What counts as a short-term rental under the state chapter? IC 36-1-24 covers specified residential units rented "for terms of less than thirty (30) days at a time through a short term rental platform."
Did the rules change before the final vote? Citizen Portal reports that a committee accepted a substitute version of Bill 52-26 on a 3–2 vote. Its summary doesn't list the changes from the original draft.
If you're weighing a South Bend house that has been rented on game weekends, Lesley Sweeney can help you work out which approvals pass to you, which ones you'd need to reapply for, and what to confirm with the city before your offer deadline. Schedule your complimentary market consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
