Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...
The owners of a single-family home can rent their property online on a short-term basis despite a covenant prohibiting commercial activity on the lot, the Wisconsin Court of Appeals held June 13 ( Forshee v. Neuschwander , 2017 BL 199704, Wis. Ct. App., No. 2016AP1608, 6/13/17 ).
The restrictive covenant is ambiguous about whether short-term rentals constitute commercial activity, so it can’t be enforced against the homeowners to block them from renting to others, the court said in an opinion by Judge Lisa K. Stark that reversed a lower court’s decision.
The decision highlights the difficulty in applying existing property laws and regulations to the popular practice of short-term renting through online platforms such as Airbnb Inc. and VRBO.com. Short-term rentals are part of the gig economy, which is characterized by freelance or contractual, instead of permanent work.
Seven neighbors of homeowners Richard Lee and Mary Neuschwander alleged that the Neuschwanders violated the covenant by renting their property via vacation rental website VRBO. They alleged the Neuschwanders made $55,800 in rent in 2015.
The court said that reasonable minds could differ as to whether short-term rentals meet the dictionary definition of “commercial activity.” The fact that the Neuschwanders sell to tenants the right to use their property for profit suggests commercial activity, the court said. On the other hand, the tenants are using the property as a residence and no evidence shows any exchange of money occurs on the lot, the court said.
The court said that because Wisconsin’s public policy favors unrestricted property use, all doubt should be resolved in favor of the property owner.
An attorney for the Neuschwanders’ neighbors didn’t immediately respond to a request for comment.
Spears Carlson & Coleman SC represented the neighbors. Appellate Consulting Group represented the Neuschwanders.
To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com
To contact the editor responsible for this story: Keith Perine at email@example.com
Full text at http://src.bna.com/pNU.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)