The Legal Intelligencer
(by Krista-Ann M. Staley and Amie L. Courtney)
Whether you are a property owner interested in offering a room as a short-term rental, a resident opposed to short-term rentals in your neighborhood, or a municipal official hearing from concerned residents of either opinion, you should be aware that unclear zoning regulations can cause significant roadblocks for all sides of the debate.
Whether you are a property owner interested in offering a room as a short-term rental, a resident opposed to short-term rentals in your neighborhood, or a municipal official hearing from concerned residents of either opinion, you should be aware that unclear zoning regulations can cause significant roadblocks for all sides of the debate. The Pennsylvania Commonwealth Court has addressed these roadblocks in several cases, recently adding Reihner v. City of Scranton Zoning Hearing Board, No. 256 C.D. 2017 (Pa. Commw. Ct. 2017) to its growing line of cases involving the application of ambiguous zoning regulations to short-term residential rentals. The uptick in these cases reflects the increased popularity of the trend, expanded by online sites such as Air BnB, VRBO, and HomeAway that connect travelers with local residents or homeowners that want to rent rooms or residences for short-term stays.
Reihner, along with its predecessors, originated with a notice of violation issued in response to neighbor complaints about the use of a single-family home, or portion thereof, as a short-term rental property. Critically, in each of these cases, the municipality had not amended its zoning ordinance to address short-term rentals. Rather, each municipality relied on existing regulations and terms as the basis for enforcement. In each case, the Commonwealth Court determined that the treatment of the newly popular rental activity was ambiguous under the existing applicable zoning regulations, and that Section 603 of the Pennsylvania Municipalities Planning Code requires interpretation of ambiguous terms in a zoning ordinance to be in favor of the property owner, i.e. in a manner that allows the broadest use of the property. While the specific definitions and regulations at issue in each case are unique to each municipality’s ordinance, the court’s application of the rules of interpretation to address the evolving use is relevant throughout the state.
The Commonwealth Court first addressed a zoning notice of violation for a short-term rental in Marchenko v. Zoning Hearing Board of Pocono Township, 147 A.3d 947 (Pa. Commw. Ct. 2016). There, a property owner rented her primary residence in the R-1 Low Density Residential Zoning District on weekends; she resided at the property for 114 of the first 185 days she owned the property, and rented it out the remaining 71 days. The township’s notice of violation indicated that she was using the property for commercial purposes (a vacation rental) in violation of the zoning ordinance.
On appeal, the Commonwealth Court overturned the board’s decision, finding that the property owner’s short-term rental of her primary residence was consistent with the permitted “single-family dwelling” use. The zoning ordinance defined “single-family dwelling” as “a detached building designed for and occupied exclusively by one family.” The court found that one family (i.e., the property owner) exclusively occupied the residence most of the time, that the definition did not prohibit rental activity on the property, and that the use did not satisfy the dictionary definition of a lodge. The court noted that the board should have broadly construed single-family dwelling, rather than straining to classify the use as an undefined lodge.
The Commonwealth Court next addressed a zoning notice of violation for a short-term rental in Shvekh v. Zoning Hearing Board of Stroud Township, 154 A.3d 408 (Pa. Commw. Ct. 2017). In addition to addressing a different zoning ordinance with unique terms, this case deviated from the facts in Marchenko because here the property owners only occupied the subject property about one week per month. The notice of violation in this case indicated that the property owners were operating a “tourist home,” which was not permitted in the S-1 Special Recreational Zoning District where the subject property was located. The ordinance defined tourist home as “a dwelling in which at least one but no more than six rooms are offered for overnight accommodation for transient guests for compensation.”
The property owners appealed the notice to the zoning hearing board, which determined that the short-term rental was the equivalent of a tourist home and upheld the decision. The trial court affirmed and property owners appealed to the Commonwealth Court. The Commonwealth Court rejected the broad interpretation of tourist home, which the zoning officer indicated was a use where a property owner rents out less than an entire dwelling. As in Marchenko, the court found that the use of a residence for short-term rentals fell within the definition of “single-family dwelling,” albeit under a slightly different definition (namely, “a detached building, designed for or occupied exclusively by one family …”). Here the controlling factor was not that the owners used the property as their primary residence, because they did not, but that the property was “designed for use by one family.” Because the use fit the ordinance’s definition of single-family dwelling, and the ordinance did not prohibit owners of single-family dwellings from renting them out, the Commonwealth Court reversed the decision. The court again noted that the municipality could not effectively amend the zoning ordinance by shoe-horning short-term rentals into the tourist home category of uses.
Next, in Slice of Life v. Hamilton Township Zoning Hearing Board, 164 A.3d 633 (Pa. Commw. Ct. 2017), the Commonwealth Court considered a third short-term rental scenario, in which the cited property owner never resided at the subject property. Instead, a limited liability company whose sole member resided in Brooklyn, New York owned and operated the property. The township’s notice of violation identified the short-term rental use as a “hotel and/or other types of transient lodging, rental of single family residential dwelling for transient tenancies,” a use not permitted on the subject property.
The property owner appealed, arguing that the notice improperly established the “transient lodging” and “transient tenancies” uses, which the zoning ordinance did not define. After eight hearings, the zoning hearing board upheld the notice. The trial court affirmed the decision. On appeal, the Commonwealth Court noted the distinction between the owner’s lack of residence at the property in this case and the residency of the owners in Shvekh andMarchenko, concluding that this factor was not outcome-determinative. Instead, the court focused its analysis on the ordinance language, noting, as it had in the previous cases, that the board is bound by the ordinance as-written and cannot attempt to amend the ordinance by shoe-horning a new use into an existing defined term of the ordinance. Finding that the ordinance did not prohibit the cited rental, the court overturned the notice of violation.
The Commonwealth Court reviewed each of these cases in its recent Reihner decision. In Reihner, the city of Scranton issued a notice of violation against property owners who rented rooms in their home for a maximum of four nights at a time. The owners continued to live in their house during the rental periods. They did not provide any meals to their guests, but did have a kitchen available for guests to use. The city’s zoning officer determined that the property owners were operating a “bed and breakfast” in violation of the city’s zoning ordinance and issued a notice of violation. The city’s zoning ordinance defined a “bed and breakfast” as: “the use of a single family detached dwelling and/or accessory structure which includes the rental of overnight sleeping accommodations and bathroom access for a maximum of 10 temporary guests at any one time (except as otherwise provided for in this ordinance), and which does not provide any cooking facilities or provision of meals for guests other than breakfast. This use shall only include a use renting facilities for a maximum of 14 consecutive days to any person(s) and shall be restricted to transient visitors of the area.”
The zoning hearing board upheld the notice of violation on appeal, finding that the rental activity fit the definition of “bed and breakfast.” The trial court agreed, finding that the definition does not require that breakfast is served, but, rather, prohibited owners from serving other meals.
As in the previous cases, the Commonwealth Court overturned the notice of violation. The court recognized the property owners’ and city’s competing interpretations of the “bed and breakfast” definition. Because it would actually limit the use of the subject property, the court ultimately rejected the city’s interpretation that a rental could be a “bed and breakfast” even if breakfast was not served, as long as no other meal was served. The court identified the property owner’s interpretation, which required a “bed and breakfast” to serve breakfast without providing guests access to cooking facilities to prepare breakfast, as more reasonable. The interpretation in favor of the broadest use of property compelled the court to find the cited short-term rental did not qualify as a “bed and breakfast” under the city’s zoning ordinance. The court did not determine whether the use was a permitted single-family detached dwelling because the only question before it was whether the use was a bed and breakfast.
As demonstrated by these cases, complications can arise when municipalities do not amend their zoning ordinances to reflect new and evolving uses. One potential result is language that pre-dated a new or newly popular use becoming ambiguous when applied to that use. The resulting ambiguities can create confusion within municipal governments and among their residents, risking financial loss and delay by all parties. Accordingly, property owners and municipalities alike should seek clear zoning parameters that balance owners’ use of their property and the health, safety, and welfare of others. In fact, the Commonwealth Court specifically noted in Reihner that a municipality has the legislative authority to fill gaps in ordinances to address shot-term rentals. Until a municipality takes this action, the Commonwealth Court has made it clear that a municipality cannot cure a gap by “shoe-horning” the new use into existing use categories.
*Reprinted with permission from The Legal Intelligencer. © 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.