Thinking about going into the web-based rental business in Pennsylvania (or trying to stop your neighbor from doing it)? Read this article first.
A recent Supreme Court of Pennsylvania case, Slice of life, LLC vs. Hamilton Township Zoning Hearing Board, held that purely transient use of the property is not permitted in residential zoning districts restricted to “single housekeeping units.” In Slice of life, LLC, the property in question was governed by a 1985 Hamilton Township Zoning Ordinance permitting use for “single-family” dwellings and further defining single family as “a single housekeeping unit.” The owner of the property was an LLC whose sole member never lived at the property and purchased it entirely for use as a for-profit commercial enterprise. The property was advertised as a rental with a maximum stay of one week. The property’s use as a short-term rental resulted in noise complaints, instances of public urination, nudity, lewd conduct, bonfires, and fireworks. There were multiple police complaints related to the property. Eventually, a zoning officer issued an enforcement notice because of the property’s use for “transient tenancies.”
Property owners generally have the right to enjoy their property limited only by things like zoning ordinances substantially related to the protection of public health, safety, morality, and welfare. Residential zoning districts are a historically acceptable way to promote the residential character, amenity, stability and safety of “family” oriented neighborhoods (e.g., quiet, desirable levels of density, residents engaged in the neighborhood and invested in maintaining the quality of the community). Slice of Life, LLC, explains that “single housekeeping unit” is a phrase commonly used to mean family within zoning ordinances that require occupants to both: (i) behave functionally as a family unit, thereby cooking and living together, sharing access to the entire house, attending social functions together, etc., and (ii) remain for substantial periods, moving only for health or personal preference reasons.
At the Commonwealth level, the court in Slice of Life, LLC, found that the person signing the short-term leases was a family for purposes of the ordinance, and any other persons staying at the property were guests of the family. Because “transient” was not used or defined in the ordinance, the court reasoned that where short-term rentals were not specifically prohibited, they were permitted, as ordinances needed to be interpreted to allow for the broadest possible use of the land. The Supreme Court of Pennsylvania clarified that “web-based rentals of single-family homes to vacationers and other transient users for a few days at a time” is a purely transient use of the property that is not permitted where a zoning ordinance requires use as a “single-family dwelling.”
While Slice of life, LLC, dealt with an extreme set of facts, the holding in the case clearly indicates that “single-family dwelling” restrictions within zoning ordinances prohibit the use of property as short-term rental property investments. Had the tenants in question behaved in a more discreet manner, the use would have been no less transient in nature. If you seek to purchase property for the purpose of renting the premises for short-term stays, or you are concerned about the “transient tenancies” in your neighborhood, make sure to consult with a real estate attorney to determine the regulations your municipality has in place concerning the property in question.