MIDDLESEX - Lynnfield officials may have secured a game-changing victory over sharing-economy giants like AirBnB and VRBO without ever having to step into a courtroom to face lawyers for the new age businesses.
Settling a court case that had been closely watched by municipal leaders across Massachusetts, Land Court Judge Keith C. Long recently upheld Lynnfield's 2016 zoning prohibition on short-term house rentals.
More notably, in his 16-page decision, the judge further declared homeowners arranging rentals through Internet platforms such as AirBnB cannot enjoy "grandfather" legal protections, because the businesses too frequently redefine the nature and terms of their rental models.
"AirBnB-Type rental arrangements are not [grandfathered] uses. Rather, they are ever-changing technologies that produce materially-different uses as the technology changes," the judge concluded in a ruling reached on Sept. 19.
Technically, the recent land court decision does not set a statewide legal precedent regarding short-term rentals and major players in the peer-to-peer economy like AirBnB, VRBO, and ride-sharing service Uber.
However, because those online business platforms are relatively new, government authorities have only recently begun contemplating how to regulate the new tech sector. For example, Uber, founded in 2009, for years managed to evade oversight from government entities.
Home-sharing platforms like AirBnB and VRBO, which allow homeowners to rent out portions or the entirety of their residences for days or weeks at a time, have similarly only recently become subject to government restrictions. In fact, just this past summer, the City of Boston imposed its first-ever ordinances regarding peer-to-peer home rentals.
The new standards allow businesses like AirBnB to continue operations, but imposes new oversight fees and establishes a multi-level classification system for properties based upon the scope and frequency of rental-service use.
Given the sparsity of such bylaws and ordinances, municipal officials worried about overstepping their authority have few court decisions to reference as a guide. In turn, many smaller suburban communities, wary of getting drawn into a prolonged legal-battle with multibillion corporations, have stayed on the sidelines until the dust settles.
Compelled by unsolved murder case
Lynnfield, which had like many of its neighbors remained largely silent about services like Uber and AirBnB, was unexpectedly drawn into the regulation fray during Memorial Day weekend of 2016.
According to local police, at approximately 3 a.m. on May 29, 2016, 911 dispatchers were notified about a shooting at a large party being held at a mansion overlooking the Beaver Dam Brook Reservation.
Upon arrival, police found 33-year-old Randolph resident Keivan Heath dead from a gunshot wound. His murder remains unsolved to this date.
During the investigation into the fatal shooting, Lynnfield officials learned that the sprawling 3-acre property at 8 Needham Rd., situated in a quiet single-family neighborhood between Lowell and Main Streets, had been rented out by homeowner Alexander Styller through rental-service Flipkey, which is affiliated with TripAdvisor.
According to Styller, he regularly utilized short-term rental platforms like FlipKey, AirBnB and HomeAway, and on May 27, he received $6,418 for the Memorial Day use of his home. Before agreeing to the rental, the Lynnfield resident had been assured that only five guests would be staying in his residence for a small college reunion.
Days after the murder, Building Inspector John Roberto III issued Styller a case-and-desist order that forbid him from renting out his 5,548 square foot house for "lodging purposes on a short-term basis". The married father, who told town officials he relied upon the rental income to support his family, challenged that decision by appealing to Lynnfield's Zoning Board of Appeals (ZBA). During a series of contentious public hearings, where neighbors told town officials the murder had left them terrified about their safety, the ZBA rejected that request.
The Board of Selectmen soon followed up by sponsoring a Town Meeting initiative that banned short-term home rentals of fewer than 30 days. Proponents of the zoning amendment like Town Counsel Thomas Mullen, though opining local bylaws already prohibited residents' use of services like AirBnB and VRBO, argued the new regulations would settle the matter.
The warrant article was overwhelmingly approved by Town Meeting in the fall of 2016.
Agreeing with the Town Counsel Thomas Mullen's initial assessment of Lynnfield's bylaws, the land court judge concluded the town's pre-2016 zoning code sufficiently prohibited homeowners from treating their dwellings as for-profit enterprises.
"Mr. Styller's frequent rentals of his residence, intended as a substantial supplemental source of income, are not an incidental use. Homes are to be used as residences, not for profit," Long wrote.
Grandfather status doesn’t apply
Already appealing the ZBA's refusal to overturn Roberto's original case-and-desist order, Stryller also challenged the town's right to subject his home to the newly-enacted zoning rules. Specifically, attorneys for the Malden businessman argued their client enjoyed grandfather protections.
In many communities, a myriad of homes and businesses were constructed and occupied before local authorities established zoning controls.
Also known as pre-existing, non-conforming structures or uses, grandfather protections exempt property owners from having to bring their properties into compliance with those new regulations — so long as alterations or changes in use aren't proposed.
Attorneys for the Lynnfield resident argued their client did not have to comply with the new short-term rental controls, because Stryller had already been utilizing a number of services like AirBnB when the legislation passed at Town Meeting.
However, Long, noting that peer-to-peer sharing services like AirBnB have since their founding dramatically altered their terms-of-service agreements, ruled it would be unreasonable to grant homeowners blanket grandfather protections in light of those changes.
In the decision, the judge noted that AirBnB's first business model traditionally entailed the short-term use of small spaces like single bedrooms while the primary residents were still within the dwelling. However, that typical arrangement is now far from standard.
"This model had a limited audience of persons who did not mind staying in someone's home while the owner was still around…What that model lacked, and want the larger pool of potential users clearly wanted, was privacy," Long wrote.
"AirBnB thus expanded to include situations where the owner, as here with Mr. Styller, would be completely absent during the rental. This caused a material change in the type of use," he added.
Long also dismissed the notion that the sharing-economy industry allowed each client to pick how to market their homes, and as such, users like the Lynnfield resident could be extended grandfather protections if they never altered that strategy.
"It is no defense for an owner to say that he will not participate in these new models. There is no effective enforcement mechanism to police whether he does or not…[and a] building inspector cannot check with every individual short-term renter to see how, and on what terms, their rental was arranged," the judge concluded.
Styller, who in the summer of 2017 agreed to refrain from renting out his 5,584 square foot house until the court case was settled, reportedly no longer owns the 3-acre parcel.
In fact, it appears the plaintiff walked away from the sprawling estate months before the land court decision was released. According to real-estate records, the Needham Road property was purchased last July for roughly $2 million.