Is it okay to creat a lease for a long term guest? The guest claimed he needed a notarized lease stating that he was living at our residence to obtain a license from the dmv. What are the risks involved if any?
It depends on local laws if you need to create a renting agreement for long term stays. A guest is not a tennant. Allways be carefull if people going to use your address as "the place they live". My long term stay guests are international students, if from outside EU they need (obligation) also an address (like to obtain a permit iand to registrate at municipality). I allways put in an additional writing the reason for a stay (to study or work or doing internship at XXX for period XXX-XXX). If stay is more then a few months, it's renting contract only (no Airbnb).
He/she should get a long-term rental agreement, if he/she wants a licence it seems like a very convoluted and expense way of getting one with possible criminal intentions behind it.
There is plenty example of guest that seem perfectly reasonable people at first only for them to turn into nightmare guests.
Your doing short term rental full stop, doing favours for guest rarely has an upside.
Don’t do it. First he doesn’t need a notarized lease. That’s ridiculous. Second, he needs to move in first. Then his out of state license will be good for a while.
If unsure, call the DMV and ask if this is their policy. There’s a difference between long term guest and long term permanent tenant (a year or more). That license and your address could be tied to other things for years.
As a former LTR landlord I say proceed with caution.
I don't know what the laws are like in your state as opposed to the UK where I live, but I have had many lodgers in my home as well as Airbnb guests and no one has ever asked for a notorised lease before, just a regular lease to get a parking permit etc. Good advice from @Christine615 to call DMV and ask them if this is necessary or not.
I woud be wary anyway of guests (as opposed to tenants or lodgers) using my address as their permanent residence. People can do all sorts of shady things once they have proof of residence and you are not opening the guest's mail, so don't know what they are really up to.