Is a real estate salesperson/broker license needed for short term rentals?
In a historic decision, the Superior Court ruled in favor of the McGrath Law Firm’s client. Client was accused of violating civil and criminal regulations and laws regarding short term rentals of Airbnb and Homeaway properties for failing to maintain a real estate salesperson or broker license. McGrath Law Firm through Attorney Daniel Corley argued before the New Hampshire Real Estate Commission and Superior Court that our client did not need to obtain a real estate salesperson or broker license to provide rentals through Airbnb or Homeaway properties.
The New Hampshire Real Estate Commission disagreed and attempted to enforce a subpoena requesting information on the rentals and refer the matter out for felony prosecution. Attorney Corley argued that Real Estate Commission lacked jurisdiction to conduct a hearing and issue a subpoena for short term vacation rentals booked through Airbnb and Homeaway. The Superior Court upon review found that “no statutory grounding to regulate such hotel-like transactions because they do not involve an interest in real estate. RSA 331-A:2 and 3.”
The Court held: “The Court agrees with [client] that the Commission lacks jurisdiction to license and discipline persons who want to, advertise and manage typical Airbnb and Homeaway bookings for third party owners.” As the Court noted, “the statute is ambiguous with respect to the definition of an offense”. If each Airbnb or Homeaway transaction for an overnight stay is an ‘offense’, the maximum available civil penalty could be enormous.” The Court also held that the client is also not liable for any criminal offense. The Court held that “the Commission only has licensing disciplinary jurisdiction over the person who act, directly or indirectly, as [real estate brokers] or [real estate sales] people. RSA 331-A:3. The term lease and real estate includes “leaseholds and all other interest or stakes in land or business opportunity which involve any interest in real estate.” RSA 331-A:2. The Court held that the typical Airbnb, Homeaway or BRBO transaction does not create a leasehold or interest or stake or estate in land. This is true regardless as to whether the transaction is captioned as a short term rental.
Licenses for short term rentals are a legislative matter
As previously argued by Attorney Corley before the Real Estate Commission, this is a legislative matter and the Court agreed. “To be sure, the legislature has not yet developed a comprehensive statutory scheme to govern the rapidly changing practice of ‘home sharing’ but the Commission cannot fill lacunae in our statutes by pretending that the revocable license to occupy a dwelling, or a room in a dwelling-i.e., the legal equivalent of a license that a movie theater grants to its patrons is a leasehold interest in land.” Furthermore, requiring a real estate broker’s license in order to “market, broker, manage or sale Airbnb-type rentals would raise constitutional concerns.” See State of New Hampshire v. Kerri McCauley, Merrimack Superior Court, 217-2020-CV-00177, Judge Andrew R. Schulman, Date of Decision October 7, 2020.
The seasoned lawyers at the McGrath Law Firm, founded by attorney Peter McGrath, will walk you through your legal matter to address your concerns and achieve your goals as efficiently as possible. Daniel Corley and the experienced attorneys at McGrath Law Firm can assist with your estate planning. Call us to schedule your consultation at (603) 224-7111.