Calling All AirBnB-ers: PA Supreme Court Bans Certain Short-Term Home Rentals | Obermayer Rebmann Maxwell & Hippel LLP

The Pennsylvania Supreme Court has ruled unanimously that short-term rentals in areas set aside for “simple housekeeping units” are inconsistent with Pennsylvania legal precedent and government policy. The move is expected to significantly affect 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 overturned the Commonwealth Court and ruled in favor of Hamilton Township and its zoning board. See: Slice of Life, LLC et al. against Hamilton Township Zoning Hearing Board, et al. In its opinion, the Court found that although the applicable zoning ordinance did not specifically prohibit the short-term rental of apartment houses, such use was nevertheless prohibited. The Court said that prohibited uses of real property do not have to be specifically excluded in a zoning ordinance.

The underlying facts of the case involved a New York investor, who purchased a house in the Poconos, through his company Slice of Life, as an investment property. The property has been used exclusively for short term rentals. It was advertised online through internet rental companies, such as Home Away and Air BnB, and was only looking for short-term rentals. Specifically, it allowed reservations of a minimum of two nights and a maximum of one week. The property was advertised as a six-bedroom house sleeping seventeen.

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

Previous PA court decisions have consistently applied this functional standard in its analysis to cases involving similar facts. For example, the courts have authorized the use of a residential house by a landlord to provide lodging, meals and care for physically and mentally disabled people in their home. Conversely, the courts have determined, under the same standard, that a residential home cannot be used as a halfway house or group home for foster children. These decisions were based on the fact that the average stay in halfway houses (2 to 6 months) and in group homes was too short to be compatible with the single-family concept.

In the ongoing case in the PA Supreme Court, the landlord has received complaints from neighbors. A neighbor testified that certain activities – public urination, fireworks, loud music, bonfires, nudity and lewd conduct – threatened the health, safety and well-being of his family and home. The police were also called to the scene several times. Ultimately, the Township of Hamilton 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 have an impact on the short-term rental market in Pennsylvania. Primarily, this ruling gives residential owners powerful ammunition to fight a short-term rental home in their neighborhood. If you’ve ever thought about renting out your home, it’s important to find out if it’s allowed in your area. Otherwise, not only will you be subject to a potential code violation and a fine, but should an incident occur on your property, there could be serious consequences. For example, if an injury occurred on the property, during prohibited use, it could be presented as evidence in litigation or to waive your landlord’s coverage.