Even you can rent it out on AirBnb

by Chap Petersen

One of the best parts of being a Virginian is our State Constitution, specifically Article I, Section 11 which states that private property rights are fundamental and cannot be taken without just compensation.

While local governments have the ability to zone property into appropriate categories, they cannot arbitrarily restrict uses. In other words, if your property is zoned “residential,” you’re allowed a residential use.

A decade ago, Virginia confronted the issue of short-term rentals, where owners chose to market and rent their homes. The use did not change – the inhabitants did. In the face of competing pressures the General Assembly reached a compromise: localities could regulate short-term rentals and also require them to pay “transient occupancy tax” — just like traditional hotels. In the absence of regulation, the landowner’s rights under Article I, Section 11 control.

“Richard’s Retreat” is a bucolic destination on the banks of Aquia Creek, with a dock and luxury home. Families can rent the Retreat for short-term stays. (It’s a favorite for Marines on leave from Quantico). Stafford County has no law prohibiting short-term rentals. Indeed, a Google search for “Stafford County short-term rental” will bring back nearly 100 hits.

Prior to opening for business, the owners registered the Retreat with the County’s Commissioner of Revenue and obtained a business license. After collecting any charges, they dutifully forward the appropriate taxes to the State and County. Sounds pretty dull, right?

Last summer, a County inspector issued a Notice of Violation to the Retreat owners, claiming they were illegally running a “business.” (Of course, they have a business license – from the County). My clients promptly appealed the Notice to the Board of Zoning Appeals. After a few months of legal wrangling, including an aborted “rescission” notice, the County ended up filing suit to shut down the Retreat on the grounds it was a … hotel!?

Six months later, the parties went to trial. Thankfully the good guys won, as the judge agreed with me: (1) a house is not a hotel and (2) in the absence of local regulations, the owner has full rights under the State Constitution. The Retreat is still open and you can rent it for a pleasant weekend this summer and fall. Nobody got hurt and the County will continue to collect its taxes.

I’ve fought some major battles over the past three years to enforce local zoning laws, i.e. against unchecked data center growth. But sometimes it’s OK to just let a house be a house.

Chap Petersen, a former state senator, practices law in Northern Virginia. This column is republished with permission from his newsletter, The Virginia Attorney.