New Jersey woman files lawsuit hoping to strike down PA law requiring license to manage AirBnB rentals for homeowners

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THE POCONOS — A New Jersey woman has filed a lawsuit against the Pennsylvania Real Estate Commission arguing that the law requiring that she obtain a real estate broker’s license to manage vacation rental properties on websites like AirBnB is a violation of her constitutional right to earn a living, according to a press release issued by the Institute for Justice.

According to the release, Sally Ladd owns two vacation properties in the Poconos. A few years ago, she started her own business assisting fellow property owners manage their vacation rentals on websites like AirBnB and others. After three years, the Pennsylvania Department of State informed her she was under investigation for allegedly operating an unlicensed real estate brokerage. Ladd shut down the business in order to avoid fines or jail time.

Under Pennsylvania law, anyone who helps list a property on an online rental site must be a state-licensed real estate broker, which means they must successfully complete several instruction courses, pass two exams, spend three years working under an established broker, and open a brick-and-mortar office in Pennsylvania, according to the Institute for Justice’s press release.

In the lawsuit, Ladd argues that she has no interest in selling homes — she merely wants to help her clients list rentals.

“I didn’t understand why they would want me to get a broker’s license,” Ladd said in the release.  “I don’t have any interest in selling houses, and don’t see why I should have to spend three years working for somebody who does, just to keep managing vacation rentals.”

The Institute for Justice argues that the Pennsylvania law protects established brokers from competition “by giving them a stranglehold on the entire industry—including the emerging short-term vacation rental market,” and that the law forced Ladd to go out of business.

“At 61 years old, (Ladd) was hoping to rely on it as a source of stable, home-based income into her golden years,” the Institute for Justice’s release said.  “Instead, made to choose between obtaining an onerous license she didn’t need, and breaking the law by continuing to manage vacation properties, Ladd felt forced to shut down her business. That’s a choice that no one should have to make.”

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