On July 18 my company, Pocono Mountain Vacation Properties, along with a former client, filed suit against the State of Pennsylvania challenging the state’s current laws regarding property management licensure.
As an entrepreneur who managed clients’ vacation properties in the Pocono Mountains for 3 years, I recognized the opportunities afforded by the rise of the sharing economy in recent years — especially given the emergence of sites like Homeaway/VRBO, TripAdvisor/Flipkey and Airbnb. I saw a real chance to carve out a niche for myself in the world of short-term vacation rentals, saving property owners needless headaches and hassles by helping them post, market and book their homes online. I did all of this on my laptop, from the comfort of my home in New Jersey.
But earlier this year, I received a call from the Pennsylvania Department of State informing me that I was under investigation for the unlicensed practice of real estate. I was shocked and disappointed to learn that, to operate legally, I would have to spend three years working for an established broker, pass two exams, and set up an office in Pennsylvania. (The two properties currently listed on this website are my own.)
While my company does not stand to benefit financially from the lawsuit filed on my behalf by the Institute for Justice, a win in this case could potentially impact property management laws nationwide, bringing them into alignment with the new sharing economy. At least 40 other states have similarly outdated laws on their books.
PA Property Management Laws: Protectionist and Outdated
Pennsylvania’s attempt to treat me like a real estate broker impedes my freedom to support myself by doing work I love. In particular, requiring me to serve established brokers for three years does nothing to protect the public from harm. What it does do, however, is protect traditional real estate brokers from the competition offered by an emerging vacation rental market. But economic protectionism is not a legitimate use of government power, and I do not believe any manager of short-term rentals should have to become a real estate broker just to manage a few vacation homes.
That’s why, along with a former client, Samantha Harris, I have teamed up with the Institute for Justice to take on Pennsylvania’s real estate cartel and vindicate our constitutional rights. Samantha will tell you she is fighting for her “right to avail myself of her [Sally’s] services.” (You can read Samantha’s story here.)
If you plan to rent a vacation property in the future, you probably don’t realize that the real estate industry’s monopoly may be inflating rental rates and limiting the number of available properties in the region where you wish to travel. If you own or are managing a vacation rental property “under the radar” in PA and feel hamstrung by the current laws, contact your congressmen. In either case, I encourage you to send a donation to the Institute for Justice to help support litigation against burdensome government regulations and licenses in cases across the country.
With more and more companies joining the new sharing economy each year, the time has come for the real estate industry to release its tentacles from the vacation rental market. They can do it on their own, or they can wait until the state tells them they must. But our legal team is confident that they will ultimately join the fray.