Property use for short-term renting is an increasingly popular trend, especially through services such as Airbnb and HomeAway. However, renters need to be aware of how their individual municipality regulates this type of rental.
Pennsylvania courts are determining if and where property owners are permitted to rent their properties on a short-term basis through a case-by-case determination.
For example, two recent Pennsylvania cases involving short-term rentals were decided differently based on the respective zoning areas, governing ordinances, and individual facts and circumstances of the cases.
In April 2019, the Pennsylvania Supreme Court reversed the Commonwealth Court’s 2017 decision in Slice of Life I, which held a short-term rental for property use was consistent with a residential single-family dwelling use. In Slice of Life II, the Supreme Court held the corporate owner who used and marketed their six-bedroom dwelling as an investment property engaged in tourism and short-term rental was in violation of the zoning ordinance. Specifically, the Court was bound by the zoning board’s determination that ‘short-term transient lodging rental business and use of the property is the operation of a business in the Single-Family Residential District, which is contrary to the provisions of the ordinance resulting in a purely transitory occupancy of the property.’
Since the dwelling was owned by a non-resident corporation and used on a ‘purely transient’ basis as a commercial business, it was deemed inconsistent with single-family dwelling use. The Court emphasized the importance of permanent residency in a residential zoning district and the meaning of ‘family’ as defined by the relevant ordinance.
In September 2020, Pennsylvania’s Commonwealth Court affirmed the Trial Court’s previous holding in Leinberger v. Stellar as Trustee of Deborah E. Stellar Revocable Trust allowing short-term rental use of a single-family dwelling located in a preservation zoning district The property was located within two preservation zoning districts, in which both zones allowed property use as a single-family detached dwelling.
The owner put an additional luxury cabin on their property, designed as a single-family detached dwelling, located in one of the zoning districts with an ordinance stating that the district is not intended to serve as an area for widespread suburban/exurban development. The owner rented the cabin to third parties for different lengths of time for about 30% of the year and used the Cabin for family and friends for the other 70% of the year. However, the cabin was not used as the owner’s primary residence.
In light of Slice of Life II, the Commonwealth Court revisited this decision of whether short-term rental use was consistent with single-family dwelling use allowed in a preservation zone. The Court explained how Slice of Life II did not absolutely prohibit short-term rental use in a single-family dwelling.
Additionally, in Slice of Life II, the Court emphasized that exclusive for-profit use in a residential zoning district was contrary to single-family dwelling use under the zoning ordinance. However, here, it was an issue of the short-term rental of a cabin, during a portion of the year, in an agricultural preservation zoning district.
Noting the factual differences, involving materially different zoning areas with different ordinances and definitions within those ordinances, the court distinguished the two cases, holding the cabin did not constitute a violation of the relevant ordinance.
In Pennsylvania, some municipalities allow this type of use, while some prohibit it. As illustrated by the two different cases above, having knowledge of and understanding the relevant zoning ordinances and regulations is key in determining whether you can use your property. Having an understand of what a zoning ordinance expressly prohibits and how it defines relevant terms and types of commercial accommodations is very important when looking into short-term rental use in a respective zoning district. Consulting a lawyer will help in understanding how an individual municipality and its respective zoning areas and ordinances define and regulate this type of activity.
