“Victory for Narragansett Landlords" - Short-Term Rental Ordinance Dealt Legal Setback
GoLocalProv News Team
“Victory for Narragansett Landlords" - Short-Term Rental Ordinance Dealt Legal Setback
Rhode Island Superior Court Judge Sarah Taft Carter ruled in favor of plaintiffs who sued the Town of Narragansett and the Town Council seeking a temporary restraining order and preliminary injunction to restrain the enforcement of the ordinance, which was enacted in May in an effort to crack down on the town's short-term rental market.
Taft Carter granted both on Wednesday.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“We are pleased with the Court’s decision recognizing that the Town of Narragansett overstepped in its attempted regulation of short-term rentals,” said Stephen Lapatin, one of the plaintiffs' attorneys, in a statement to GoLocal. “This is a victory for Narragansett landlords and property owners, and we look forward to securing ultimate victory in the case.”
The plaintiffs in the matter are “Narragansett 2100,” a nonprofit group of 370 property owners with rental property in Narragansett, and Richard and Victoria Gersten; Gary Kozak; Neal Patrick; and Elizabeth Paquelet.
The matter now goes to litigation.
About Ordinance
The decision by Taft Carter explains how the STR ordinance works - and the arguments by each side.
The STR ordinance requires that owners of a dwelling unit who rent it for "transient occupancy" submit an application and pay the required fees prior to renting, operating, advertising, or using a dwelling as a short-term rental. In addition, a host must ensure the dwelling complies with occupancy limits and parking requirements, pay an application fee, schedule an inspection with the building official, demonstrate general liability insurance on the premises in accordance with the limits outlined in the STR ordinance, and provide any additional information that the "building official may deem appropriate to show compliance.”
In addition, the STR ordinance, while defining “Short-term Rental” as “the rental or other contractual arrangements for the occupation of a dwelling unit…for a period of less than thirty consecutive nights,” prohibits short-term rentals for any period less than seven consecutive nights.
The plaintiffs in July sought a declaratory judgment that the STR ordinance is “facially unconstitutional and void under the Home Rule Amendment to the Rhode Island Constitution” and sought the TRO and injunction, to which the defendants objected.
After oral arguments were heard on September 16, Taft-Carder rendered her decision this week.
Taft-Carter on Record
Taft-Carter in her ruling explained the positions of each side — and how she came to her legal conclusion to grant the TRO and injunction.
“The Plaintiffs maintained that there is a reasonable likelihood of success on the merits because the STR ordinance licenses short-term rentals in the Town of Narragansett, which is a statewide issue, not a local matter. As a result, the STR ordinance is void,” she wrote.
“The Defendants maintain that the regulation of short-term rentals is not a statewide matter, and therefore, the Town of Narragansett is expressly authorized to enact the STR ordinance under the Home Rule Charter. In the alternative, the Defendants argue that if regulating short-term rentals is a statewide issue, the Town of Narragansett is authorized to regulate short-term rentals either expressly or ‘by necessary implication’ through the Zoning Enabling Act,” she continued.
Taft-Carter maintained the following in her decision to grant the TRO and injunction:
- The Town of Narragansett did not enact the STR ordinance in accordance with the Zoning Enabling Act’s procedures to amend zoning ordinances. The Zoning Enabling Act requires cities and towns to hold a public hearing, and give notice of that hearing, before zoning ordinances may be adopted, repealed, or amended. The notice must clearly “indicate that adoption, amendment, or repeal of a zoning ordinance is under consideration[.]” Here, the Defendants insist that the STR ordinance was enacted pursuant to authority granted through the Zoning Enabling Act; however, there is no showing that the town council provided public notice concerning a change to the zoning ordinance.
- The Plaintiffs have demonstrated that (1) the STR ordinance is a matter of statewide concern; (2) municipalities are not authorized to regulate matters of statewide concern absent authorization from the General Assembly; and (3) the General Assembly did not authorize the Town of Narragansett to enact the STR ordinance as it did. As such, the Plaintiffs have demonstrated a reasonable likelihood of success on the merits.
- The STR ordinance’s prohibition on all rentals less than seven nights directly conflicts with the General Assembly’s requirement that owners be permitted to offer short-term rentals on hosting platforms.
- The Plaintiffs have demonstrated that if the STR ordinance takes effect, their short-term rental businesses—many of which have been operated for years—will suffer reputational damage and loss of goodwill.
- If the injunctive relief is denied, the Plaintiffs are unable to rent their short-term rentals for any period less than seven nights and will need to comply with the additional requirements of the STR ordinance. If the injunctive relief is granted, the Defendants do not allege any particular hardship. Instead, the Defendants assert that the public interest in general will be harmed if the STR ordinance is not given effect. This contention is unpersuasive.
- Even without the STR ordinance, the Town of Narragansett is able to ensure the health, safety, and wellness of the community through zoning, building codes, and police power. Further, any short-term rentals advertised on an online hosting platform will need to comply with the State’s STR requirements. Absent the STR ordinance, the market for short-term rentals and the safety of those rental dwellings will not be unregulated. The equities tip in favor of the Plaintiffs.