If you plan to rent your house this summer, be prepared for a change in the State Law effective July 1, 2019.  On December 28, 2018, Governor Baker signed An Act Regulating and Insuring Short-Term Rentals which sets forth a comprehensive framework for the regulation of short-term rentals.  The new law has several new requirements including registration, the payment of both State and local taxes, payment of fees and insurance.

A short-term rental includes an apartment, house, cottage and condominium rental where at least one room or unit is rented out by an operator through the use of advanced reservations.  The Act includes regulation of online rental companies such as Airbnb, Flipkey and VRBO. Hotels, motels, lodging houses and bed and breakfast establishments are not considered short-term rentals.

All short-term rental operators will be required to register with the Massachusetts Department of Revenue (“DOR”). Operators may then choose to allow an intermediary or other agent to handle the rental of their property who can register and submit returns and taxes due to DOR on their behalf.  The State will maintain a short-term rental registry that will be accessible to the public.

The new law imposes State and local excise taxes on short-term rentals that are rented for more than fourteen days in a calendar year starting on July 1, 2019.  This taxation will apply to any rental contract entered into on or after January 1, 2019. Short-term rentals will be required to pay the 5.7% State excise tax rate to the DOR and additionally, communities can add local taxes of up to 6.0%, and 6.5% in Boston.

There are also new insurance requirements under the Act.  Operators of short-term rentals are required to maintain liability insurance of not less than $1,000,000 to cover each short-term rental, unless such short-term rental is offered through a hosting platform that maintains such coverage.

Finally, local municipalities may charge an additional community impact fee of up to 3% on certain short-term rentals. There are some other fees that are permitted by certain municipalities and these fees, unlike the taxes, are paid directly to the municipality. The law also allows for local regulation and fines for violations of local laws.  If you have any questions regarding local fees or regulations, it is strongly advised that you speak with your local municipality.

When the Conservation Commission refused to permit the construction of a house on her residential lot in a Falmouth subdivision, Janice Smyth decided to take action and sought damages for a regulatory taking of her land under the U.S. Constitution and the Massachusetts Declaration of Rights.  She was successful initially, recovering damages of $640,000.  But, in Smyth v. Conservation Commission of Falmouth, the Appeals Court reversed the lower court’s decision.

Continue Reading No Damages to Owner Whose Lot Is Unbuildable Due to Wetlands Regulations

The Boston Redevelopment Authority d/b/a Boston Planning and Development Agency has the right to challenge a foreclosure that purportedly terminated a covenant restricting the use of property to affordable housing.

Continue Reading Affordable Housing Covenants Have Protected Status in Foreclosures

In a satisfying win for Rackemann, the Appeals Court today upheld a Land Court decision that inland lot owners hold no easement rights over our clients’ waterfront property.

Loiselle v. Hickey concerns a large subdivision in Dennis with a number of ways leading to Cape Cod Bay.  An earlier case between many of the same parties established that the inland lot owners had easement rights in all of those ways.  In Loiselle, many of the same the inland lot owners argued that they also had the right to use the private beach between those ways for recreational purposes.

The Appeals Court rejected that claim.  While the decision does not break new legal ground, it does serve as a helpful review of the basic legal principles governing waterfront land.

Continue Reading More Beach Rights Litigation

Unable to leave well enough alone, the Supreme Judicial Court used a series of wooden puns in deciding not to change the longstanding rule that a landowner cannot hold a neighbor responsible for damage caused by that neighbor’s healthy tree.  Shiel v. Rowell addressed Shiel’s nuisance and trespass claims that algae on her roof was caused by the Rowells’ overhanging tree.

Continue Reading The Trouble With Trees

Massachusetts is unusual in that an owner of waterfront property typically holds title to the low water mark.  However, the area between the low and the high water marks normally remains subject to the rights of the public to fish, fowl (hunt birds) and navigate.

Continue Reading Private Parties Cannot Enforce Public Rights to Access Tidelands

Section 7 of Chapter 40A contains a statute of limitations for actions by individuals and municipalities to compel the removal, alteration, or relocation of any structure due to a zoning violation.  In Bruno v. Zoning Board of Appeals of Tisbury, the Appeals Court considered when the statute of limitations commences based on a zoning violation arising from an ANR (Approval Not Required) subdivision of land.

The Goethals owned a large lot with a single family home and guesthouse.  In 2001, the local planning board endorsed the Goethals’ plan to subdivide that lot into two parcels and, for a time, the Goethals retained both Lots.   Their guesthouse was on Lot 1 and a single family home was on Lot 2.  Lot 1 is about 12,000 square feet, whereas zoning requires a minimum lot size of 25,000 square feet for a single family home.

Continue Reading When Is It Too Late to Force a Neighbor to Cure a Zoning Violation?

Governor Baker recently announced a proposal to change state zoning laws to make it easier to build more housing units state-wide. The Governor’s goal is to add 135,000 housing units by 2025. To do so, he has introduced legislation that will allow municipalities to adopt certain changes to local zoning by a majority vote, instead of by super majority, as currently required by state law. The zoning changes include relaxing dimensional, density and parking requirements, as well as adopting smart growth and starter home zoning districts. The proposed legislation would also promote accessory dwelling units and the transfer of development rights to allow cluster developments.

Continue Reading Governor Baker Proposes Zoning Changes to Promote More Housing