By DAVID BROOKS Monitor staff Published: 6/26/2021 11:00:06 AM
A judge has ruled that you don’t need a real estate license to handle short-term rentals for other people through online marketplaces like Airbnb, the latest debate over rules and regulations of the fairly new industry.
It’s unclear whether the ruling, handed down in October by Merrimack County Superior Court Judge Andrew Schulman, will affect ongoing debates about whether towns and cities can control these short-term rentals, but it does confirm that no such system exists at the state level.
“The legislature has not yet developed a comprehensive statutory scheme to govern the rapidly changing practice of ‘home sharing’,” Schulman wrote.
“This shows that the state cannot regulate short-term rentals at all under the current legislative scheme,” said Peter McGrath, whose law firm represented the defendant, Kerri McCauley, noting that the situation is different in other states. “It leaves a question as to whether each community should start to regulate short-term rentals.”
Short-term rentals are a source of controversy in some areas, particularly tourist-oriented locations. Supporters argue that they provide a flexible source of income for property owners, while opponents say that they can ruin the local quality of life due to noise and traffic, and can make apartments and homes more expensive by removing units from the local housing stock.
The town of Conway has been particularly aggressive on the issue. It put the matter on the annual meeting warrant – where voters OK’d the idea of rentals but gave selectmen permission to regulate them – and has petitioned the Superior Court for authority to control the rentals. In recent years Canterbury has sent cease-and-desist orders to some renters, alleging violation of zoning laws, while the question of Portsmouth’s ability to regulate rentals went to the state Supreme Court, which upheld it.
October’s court ruling was spurred by a New Hampshire Real Estate Commission charge that McCauley of Conway was acting as a real estate agent without a license for handling other people’s rentals through Airbnb and Homeaway, for which she collected a fee. According to the ruling, the commission has sought to have criminal charges, not just civil charges, brought against McCauley.
Judge Schulman ruled that short-term rentals were not covered by state law regarding real estate transactions, which concern the legal term “leasehold.”
“No three-day Airbnb guest would believe that he or she obtained an interest in real estate. It is not even within the periphery of imagination that a family with a contract for a week-long Airbnb stay would … (record) the agreement at the registry of deeds,” he wrote, adding that the state rooms and meals tax “applies to short-term tourist ‘rentals’ just as if they were motel rooms” and the law “exempts such ‘rentals’ from landlord/tenant protections.”
Schulman did allow some aspects of the Commission’s complaint against McCauley to go forward, “to determine whether McCauley crossed the line into real estate practice” as part of her services.
The complaint was filed in October 2018 and covered activities stretching back several years. Its passage through the court was delayed in part by the retirement of Judge Richard McNamara, who heard a May 7, 2020, hearing on the merits of the case.
(David Brooks can be reached at 369-3313 or [email protected] or on Twitter @GraniteGeek.)