Calling All AirBnB-ers: PA Supreme Court Prohibits Some Short-Term Home Rentals

May 6, 2019

The Pennsylvania Supreme Court unanimously decided that short-term rentals in areas zoned for “single housekeeping unit” is inconsistent with Pennsylvania legal precedent and governmental policy. This ruling is expected to dramatically affect the popular online rentals of single-family homes in Pennsylvania through companies such as Air BnB and Home Away.

In a recent decision, the PA Supreme Court reversed the Commonwealth Court and ruled in favor of Hamilton Township and its Zoning Board. See: Slice of Life, LLC et al. vs. Hamilton Township Zoning Hearing Board, et al. In its opinion, the Court concluded that even though the applicable zoning ordinance did not specifically prohibit the short-term rental of residential homes, such use was nonetheless prohibited. The Court stated that prohibited uses of real property do not have to be expressly excluded on a zoning ordinance.

The underlying facts of the case involved an investor from New York, who purchased a house in the Poconos, through his company Slice of Life, as an investment property. The property was used exclusively for short-term rentals. It was advertised online through internet-based rental companies, like Home Away and Air BnB, and sought only short-term rentals. Specifically, it permitted reservations that were a minimum of two nights and a maximum of one week. The property was advertised as a six- bedroom house that sleeps seventeen people.

The critical inquiry for the PA Supreme Court was the interpretation of the term “single housekeeping unit.” This term is commonly used in zoning ordinances in Monroe County and throughout the country. In its analysis, the PA Supreme Court applied the “functional standard” by looking at whether the individuals functioned as a family within that household and if those individuals were sufficiently stable and permanent, and not just short-term or transient.

Past court decisions in PA have consistently applied this functional standard in its analysis to cases with similar facts. For example, courts have allowed the use of a residential home by a homeowner to provide lodging, meals, and care to physically and mentally disabled persons in their home. Conversely, courts have determined, under the same standard that a residential home is not allowed to be used as a half-way house or a group home for foster children. These decisions turned on the fact that the average stay at a halfway house (2-6 months) and at a group home was too short to be compatible with the single-family concept.

In the instant PA Supreme Court case, the owner received complaints from neighbors. One neighbor testified that certain activities – public urination, fireworks, loud music, bonfires, nudity, and lewd conduct – threatened the health, safety, and welfare of his family and home. Police were also called to the property on several occasions. Ultimately, Hamilton Township served a “Cease Use” enforcement notice on the owners on May 31, 2014, which was appealed to the Hamilton Township Hearing Board, then to the Court of Common Pleas and the Commonwealth Court, before reaching the PA Supreme Court.

This decision will certainly impact the Pennsylvania short-term rental market. Primarily, this decision gives residential homeowners powerful ammunition to fight a short-term rental home in their neighborhood. If you ever thought about renting your home out, it is important that you determine if it is permissible in your district. Otherwise, not only will you be subject to a potential code violation and fine, but if an incident were to happen on your property there could be severe consequences. For instance, if an injury happened on the property, during a prohibited use, it could be introduced as evidence in litigation or to disclaim your homeowner’s coverage. As a litigator with experience in premises liability and insurance coverage, the risks involved are significant and must be appreciated.