inversecondemnation.com

Zoning Inspectors Need A Warrant

An interesting Sixth Circuit case summarized on Law of the Land by Professor Patty Salkin, Jacob v. Township of West Bloomfield, 531 F.3d 385 (6th Cir. July 3, 2008), which held that zoning inspectors are required by the Fourth Amendment's search and seizure clause must obtain a warrant if the zoning ordinance they are purporting to enforce can lead to criminal prosecution. 

I won't go into the details of the decision since Professor Salkin analyzes the case here, but the case is important since many zoning ordinances are criminal or quasi-criminal in nature.  The primary penalties for violation of Maui County's zoning ordinance, for example, are criminal, with the administrative enforcement process serving as an alternative -- or additional -- process. 

In Jacob, the property owner was actually prosecuted criminally, but the court held that this was not the determinative factor, and that a zoning inspector is not subject to the warrant requirement only if she is conducting a search for "purely administrative purposes."  Slip op. at 4.  The mere threat of criminal prosecution is enough to trigger the need to obtain a warrant.  The court spelled out other factors that led to the conclusion that a warrant should have been obtained:

Defendant specifically targeted his investigation at Plaintiff after receiving a complaint about the conditions of Plaintiff’s property, and he continued to single-out Plaintiff for continuing intrusions as Plaintiff failed to comply with the land use ordinance. Defendant did not search Plaintiff as part of a “routine inspection that is part of a periodic or area inspection plan.” Similarly, Plaintiff testified that he would frequently discover Defendant searching his property without any advance warning whatsoever; in other words, Defendant’s investigations were “conducted by surprise.”

Slip op. at 4-5 (citation omitted).

Zoning Can Regulate Use Of Property, Not Ownership

A noteworthy case from the North Carolina Court of Appeals about the limits of Euclidean zoning.  Although the decision was issued in March 2008, it seems no one else has posted on the case, so we will. 

In City of Wilmington v. Hill, 657 S.E.2d 670 (N.C. Ct. App. 2008), the court struck down a local ordinance that required the owner of a garage apartment to reside either in the main residence or the apartment.  When his permit to build a garage apartment was denied and he was cited for violation of the ordinance, the property owner asserted the owner-occupancy requirement was an unconstitutional regulation of his ownership of the property.

Relying on Graham Court Assoc. v. Town of Chapel Hill, 281 S.E.2d 418 (N.C. Ct. App. 1981), the court held that while the zoning power extends to regulating the use of property, it does not allow the government to control "the manner in which property is owned."  In that case, the court held that the government had no legitimate reason to deny a permit to convert an apartment complex from unitary ownership to condominiums in a zoning district where multi-family residential use was an allowable use, because "[t]he change in ownership from a single owner to multiple owners did not alter the property's character as to multi-family residential use." 

The Broadus court applied that rule to the owner-occupancy requirement for garage apartments, and held the requirement had "no foundation in reason and bears no substantial relation to the public health, the public morals, the public safety or the public welfare in its proper sense."  The court declined to follow Anderson v. Provo City Corp., 108 P.3d 701, 706 (Utah 2005) and  Kasper v. Town of Brookhaven, 142 A.D.2d 213, 220-21 (N.Y. 1988), which upheld owner-occupancy requirements from constitutional challenges.  The court noted these decisions are from other jurisdictions and it had no obligation to follow them, especially in light of the Graham Court rule:

In the instant case, the property in question is located in a district that is zoned for single-family residences; however, garage apartments are permitted as an accessory use, incidental and subordinate to the principal use as a single-family residence. See WLDC § 18-179 (2005). Garage apartments also are allowed in certain multi-family districts in connection with conforming single-family residences within the district. See WLDC § 18-285 (2005). Plaintiff only is entitled to regulate the use of defendant's single-family residence with the accessory use of a garage apartment, not the ownership.

(emphasis original).  Thanks to my Damon Key colleague Greg Kugle for sending this case my way.

Reply Brief in Ninth Circuit Maui Vacation Rental Appeal

Today we filed the Reply Brief (925kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.

I won't go into the details, since the Reply Brief spells out the arguments.  It responds to the arguments in the County of Maui's Answering Brief, posted here.  MVRA's Opening Brief, as well as links to media coverage of the case and issue, is posted here.

County of Maui's Brief in Ninth Circuit Vacation Rental Appeal

The County of Maui has filed its Answering Brief in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.

Our Opening Brief for MVRA is posted here, along with information about the issues in the case, which include what is necessary to plead a due process property interest, and what are elements of a claim for estoppel and vested rights under Hawaii law.

Opening Brief Filed in Ninth Circuit Maui Vacation Rental Appeal

Today we filed the Opening_Brief (250kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal. 

I won't go into details of the case since the brief spells out the facts and arguments, but here are some prior posts on the case, and links to media coverage:

• Los Angeles Times: Maui: Vacation rentals and B&Bs shut down and 50 illegal Maui B&Bs & vacation rentals shut down

• San Francisco Chronicle: Maui County closes unlicensed bed and breakfasts and vacation rentals

• The Maui News: Vacation rental suit dismissed in federal court

• Honolulu Star-Bulletin: Maui B&Bs face 'crisis'

• inversecondemnation.com: Federal Court Dismisses Vacation Rental Due Process Claims -- Details (with links to the District Court's opinion, MVRA's complaint, and the briefs in the district court)

Order in Florida Short Term Rental Case

Here's the written order (1.8mb pdf) in Milo v. City of Venice, Case No. 2008 CA 552 SC (Mar. 17, 2008), the Florida case invalidating a municipality's restrictions on short term rentals that I posted earlier.  The case arose after the city's planning director determined that the local zoning ordinance restricted short term rentals in "residential" districts. 

The ruling is, of course, specific to Florida law, but there are two points worth noting:

• The court held that short term rental is not a "business" use.  "Indeed many rental properties, regardless of the duration of the rental term, are for profit ventures and could therefore be characterized as 'businesses.'"  Slip op. at 6.  The local code also permits temporary residences without limitation.

• Despite the rule that courts generally should defer to an agency's interpretation of regulations it administers, the court noted the rule that "[z]oning regulations are in derogation of private ownership rights and should be construed broadly in favor of property owners absent a clear intent to the contrary."  Slip op. at 5.  The court held that the municipality's failure to clearly define the term of tenancies in its code was fatal. 

Florida Court Invalidates Short Term Rental Restrictions

According to this report, a Florida state court has invalidated a municipality's attempt to regulate short-term rentals:

Milo [the property owner] bought more than a dozen homes on or near the island beginning in 2005 and started renting them out on a daily and weekly basis, something the city thought was addressed in -- and forbidden by -- its zoning ordinance.

[The court] didn't see it that way. In his seven-page decision, he said the city zoning code lacked key definitions and relied too heavily on state statutes -- statutes that weren't adequately referenced in its zoning code -- when making its case against Milo.

City officials thought they had a solid case, based on current code language and state rules that Planning and Zoning Director Tom Slaughter said in 2006 stipulate "the duration and frequency of rental of a single-family dwelling unit within the RSF (residential, single family) is restricted to not more than three rentals in a calendar year for periods of less than 30 days or one calendar month, whichever is less."

Download the complaint here.  Milo v. City of Venice, Case No. 2008 CA 552 SC (filed Jan. 11, 2008). 

Associated Press: "Hawaii: Tourists Make Lousy Neighbors"

In a story titled "Hawaii: Tourists Make Lousy Neighbors," the Associated Press summarizes the "transient vacation rental" issue that's been making waves on Oahu, Maui, and Kauai.  Only one county, the Big Island of Hawaii, does not actively regulate vacation rentals.  Not a very encouraging headline for an economy dependent upon tourism and welcoming visitors.

On a related note, Charley Foster at Planet Kauai expands on the inversecondemnation.com link to a story about the recent legal challenge to Sedona, Arizona's ban on short term rentals.  Charley adds a collection of links to case studies of how vacation rentals have been treated in other jurisdictions.  Check it out here.

Legal Challenge to Sedona, Arizona Short-Term Rental Ban

As reported here, a lawsuit was filed in Arizona state courts seeking to invalidate Sedona, Arizona's prohibition on short-term rentals (less than 30 days):

Approximately 450 short-term rental properties in Sedona have been impacted by the new Ordinance making it illegal to advertise short-term rentals, and the Code prohibiting short-term rentals.

This ordinance was enacted by the city council Jan. 22 to put teeth into the Code, on the books since 1995, which made it illegal to rent properties for less than 30-days

The tail end of the article lists the claims asserted by the plaintiffs, which include vested rights, selective enforcement, and other constitutional and statutory claims.

Maui Vacation Rental Ban in the News

The San Francisco Chronicle posts "Maui County closes unlicensed bed and breakfasts and vacation rentals," with background on the issue and the pending Ninth Circuit appeal.

In what is becoming a divisive battle - both in court and in residential neighborhoods - the owners of the B&Bs and rental homes charge that the new leadership of Maui County, which encompasses all three islands, has broken promises made by their predecessors to allow unlicensed properties to remain open, pending an overhaul of the cumbersome licensing process.

County inspectors began their crackdown last July, when about 20 properties were ordered to close, mainly in the Upcountry and North Shore areas of Maui.

Complete story here.  Check out the public comments on the story here. 

Disclosure: I represent the Maui Vacation Rental Association in its Ninth Circuit appeal.