Another decision regarding Short Term Rentals

Short-term rental occupancies is quite a hot topic these days. In a recent decision by the Wisconsin Court of Appeals, Heef Realty and Investments v City of Cedarburg Board of Appeals, 2015 WL 442445, the Wisconsin court decided in favor of the property owner, much in the same way as the Tennessee Court of Appeals did in a similar case from Hamilton County in 2009. See Wade v Patterson, 2009 WL 211878. In the Wisconsin case, to property owners appealed from a decision of the zoning board that the zoning regulations did not permit short-term rental occupancies. Much as in the Tennessee case, the property owners pointed out that the city did allow long-term rental occupancy and there is no definition of the minimum time permitted. Furthermore, both in Wisconsin and Tennessee, and many other states, where there is any ambiguity in the regulations, that ambiguity is usually resolved in favor of the property owners. Because there was nothing in the ordinance which established that a single-family residential use had to be for more than, let’s say for purpose of example, 30 days, the zoning board’s interpretation of the code was struck down by the court.

Similarly, the Tennessee Court of Appeals used essentially the same analysis and reach the same result in Wade v Patterson. The real lesson of these cases is that if you are drafting local zoning regulations, some care must be taken to define single-family residential use if the intent is to preclude short-term rental occupancies. It is certainly unclear that short-term rental occupancies are necessarily bad; many cities are moving in the direction of allowing such occupancies expressly by amendments to their zoning regulations. It may be, as time goes along, that more cities adopt that more progressive attitude.