VICTORY IN PENNSYLVANIA! Court Strikes Down Oppressive Real Estate License After Six Years of Litigation

Joshua Windham
Joshua Windham  ·  December 1, 2022

When we called IJ client Sally Ladd to tell her that she could reopen her business, her first response was tears. And who could blame her? Pennsylvania had forced her to shut down her small business helping others rent out their vacation homes—her main source of income—because she wasn’t a licensed real estate broker. After six years of litigation, a court had finally declared what she’d known all along: This never should have happened. 

After losing her job to the Great Recession, Sally started a small business to support herself. Working online from her home in New Jersey, she helped people in the Poconos rent their homes on sites like Airbnb. Sally helped post the properties, book rentals, and coordinate cleanings. She wasn’t doing anything clients couldn’t have done themselves—she was just saving them a bit of time and hassle, and they paid her for it. 

Until 2017. The Pennsylvania Bureau of Professional and Occupational Affairs called to inform Sally that she was under investigation for the unlicensed practice of real estate. She was shocked. She wasn’t doing home sales or complex leases, as most brokers do. But Pennsylvania didn’t care. Sally would have to get a real estate broker’s license or close her business. 

Sally looked at the licensing requirements and immediately saw that they were too burdensome for her. She would have to spend three years apprenticing with a broker, take two exams, and complete 315 hours of schooling on real estate practice, and then open a brick-and-mortar office in Pennsylvania—where she does not live. None of this had anything to do with helping people use Airbnb over the internet, and Sally couldn’t afford to spend three years studying irrelevant topics. She had no choice but to shut down. 

Sally was crushed, but she wasn’t going down without a fight. She found IJ, and we filed a lawsuit arguing that forcing her to get a full-blown real-estate license violated her right to earn an honest living under the Pennsylvania Constitution. At first, a lower court dismissed the case on the theory that courts have no authority to scrutinize the licensing requirement. But in 2020, the Pennsylvania Supreme Court corrected that error, holding that Sally could win by showing that, as applied to her, the license failed to substantially protect the public or did so in an oppressive way. Then, this past July, we had a two-day trial where we proved exactly that. 

That brings us to today. On October 31, the trial court issued a 35-page decision granting Sally complete victory. In the court’s words, the evidence proved that the “licensing requirements are unreasonable, unduly oppressive, and patently beyond the necessities of [Sally’s] case,” and therefore violate the Pennsylvania Constitution.  

The court’s decision is a total vindication—both for Sally and for economic liberty. It’s also a vindication of the never-say-die attitude that allows IJ to persevere through yearslong litigation until, finally, we prevail.

Josh Windham is an IJ attorney and IJ’s Elfie Gallun Fellow in Freedom and the Constitution.

Subscribe to get Liberty & Law magazine direct to your mailbox!

Sign up to receive IJ's bimonthly magazine, Liberty & Law, along with breaking news updates about the Institute for Justice's fight to protect the rights of all Americans.