Legislative Update April 12, 2022

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Legislative Update: April 12, 2022
Short-term rentals: residential or commercial use?

Is the use of a single-family home for short-term rentals (STRs) a commercial or residential use of that property under NH State Statute? That is the fundamental question behind the current lawsuits in the state over how much authority towns have to restrict a private property owner from renting on a short-term basis.

Residential vs. commercial use is also at the heart of the debate over Senate Bill 249, which has already passed out of the Senate and protects a property owner’s ability to rent their property while providing municipalities authority to register and inspect properties being used as a vacation or short-term rental.

Last week, NHAR testified at the House Municipal and County Committee that STRs are a protected residential use, while the NH Municipal Association argued it is a commercial use and therefore can, and should, be banned.

In a recent Superior Court case over STRs in Conway, the judge agreed with NHAR’s interpretation and overturned that town’s ban on short-term rentals, ruling that residential property rented for short-term periods is a “residential purpose” so long as the “renters continue to relax, eat, sleep, bathe and engage in incidental activities” in the same way the owner or neighbors use the property. It was a significant win for private property rights.

The Conway case is now being appealed to the NH Supreme Court, and even the NH Municipal Association concedes the decision might have statewide implications. NHAR has tried to work with the legislature and the NH Municipal Association to find a middle-ground that would avoid leaving the decision entirely in the hands of the courts.

If the NH Supreme Court upholds the lower court’s decision, then Conway would be preempted from banning STRs. Even if Conway attempts to rewrite its ordinance to seek a ban on the future use of residential property, landowners in New Hampshire have protections against local governments retroactively banning their lawfully existing uses of property. Properties currently renting therefore could not be prohibited from renting in the future.

The Municipal and County Committee is expected to take action on the bill next week.

Should private septic systems become a public utility? 

Senate Bill 257 would allow cities and towns to incorporate all private septic systems into their public stormwater utilities. That means towns would be authorized to charge a new fee to property owners who have a private septic as well as opening the door to allowing those same towns to mandate potential upgrades.

NHAR is opposed to the legislation. The House Resource and Development Committee heard testimony on the bill last week, in which even the supporters indicated that additional fees were likely if the bill were to pass. Proponents also argued that septic systems are contributing to higher nitrogen levels in lakes, ponds as well as in Great Bay. Exactly how the new fee revenues would be spent to alleviate the situation is not spelled out in the bill.

Unlike impervious surfaces, which are currently subject to the stormwater utility, the bill provides no criteria on how fees would be set but instead leaves those decisions entirely in the hands of municipal officials.

The Committee is likely to take action on the bill next week.

Rule changes, including higher fees, to be heard at RE Commission

The New Hampshire Real Estate Commission will be taking public input on proposed rule changes on Tuesday, April 19, in the OPLC offices at 7 Eagle Square in Concord. You can read the complete proposed changes here.

Among other changes, the application fee for each original individual, firm, or firm branch broker license and renewal thereof would increase from $110 to $155. And the application fee for each original salesperson license and renewal would increase from $90 to $155.

For more information, contact New Hampshire Realtors CEO Bob Quinn: bob@nhar.com.

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