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Land Court Issues Judgment Potentially Rendering Short-Term Rentals Unlawful

In what could potentially be a wide-ranging, devastating case for owners of properties used exclusively or primarily for short-term rentals in Massachusetts, the Land Court recently issued a Judgment, in Catherine S. Ward v. The Town of Nantucket, et al., that could ultimately render such rentals unlawful.

The Judgment could not only apply to Nantucket, but all Massachusetts cities and towns that do not have zoning provisions in place that address short-term rentals.

The dispute began when Catherine Ward, the owner of a property located in a residential district on Nantucket, sent a letter to the Town’s Building Commissioner asking him to order Ward’s neighbors, Peter and Linda Grape, to stop utilizing their house for short-term rentals, claiming that the rentals are prohibited by a section of the Town’s Bylaws that states:

[N]o building, structure or land…shall be used for any purpose or in any manner other than for one or more of the uses hereinafter set forth as permitted in the district in which such building, structure or land is located, or set forth as permissible by special permit in said district and so authorized.

Specifically, Ward argued that the Grapes were not using their home as a residence, as allowed by the Town’s Bylaw, but, instead, were using it for commercial purposes in a residential district.

The Building Commissioner declined to act on Ward’s request for enforcement, informing Ward that he believed that short-term rentals were not prohibited by the Town’s Bylaws. Ward appealed to the Town’s Zoning Board of Appeals, which upheld the decision. A lawsuit challenging the decision was then filed in the Land Court.

Evidence introduced at trial established that the Grapes have rented their house more often than they have used it themselves, having only occupied it between 40 and 55 days, and renting it between 90 and 111 days, each year for the past six years.

The Court agreed with Ward’s interpretation of the Town’s Bylaws, holding that they “[do not] expressly authorize short-term rentals as a principal use of ‘primary dwellings’” in Nantucket’s residential district but “may allow…rentals of primary dwellings as an ‘accessory use’ of such dwellings.”

An “accessory” use is one that is subordinate or incidental to a primary permitted use. In this case, had the Grapes lived in their home more often than they had rented it, their primary use would have likely been considered a lawful residential use of their property, and their rentals, deemed “commercial” by the Court, considered a lawful, secondary use of their property.

The Land Court’s Judgment rejected the long-held belief in Nantucket that short-term rentals are simply an as-of-right residential use in residential neighborhoods, regardless of whether property owners actually use their homes themselves. If the Court’s Decision is upheld on appeal, those property owners, in order to continue renting their homes, would have to demonstrate that the use of their properties for short-term rentals is accessory to their own primary, personal use of them.

The Judgment could not only apply to Nantucket, but all Massachusetts cities and towns that do not have zoning provisions in place that address short-term rentals. The impact will not be immediate, however, as the Judgment will likely be appealed and stayed during that process.

In Nantucket, plans are already being made to preempt a potential upholding of the Land Court Judgment as the case makes its way through the appellate process, with an Article reportedly being prepared for Town Meeting, where voters will decide if they want, or do not want, to expressly allow property owners to use their homes exclusively or primarily for short term rentals.

Everyone who owns property that they rent on a short-term basis, and everyone considering purchasing a property for such use, should follow this case closely.

Michael J. Kennefick Condo Law Blog

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Michael J. Kennefick