Pennsylvania Court Dismisses Airbnb Lawsuit

Vacation-property manager vows to appeal ruling

Harrisburg, Pa.—Today, the Pennsylvania Commonwealth Court dismissed a lawsuit challenging Pennsylvania’s real estate licensing regime. The ruling leaves in place laws that make it a crime for anyone but a fully licensed real estate broker to help property owners manage rental properties on sites like Airbnb.

The lawsuit was filed by entrepreneur Sally Ladd, who had a thriving business managing vacation homes online before a state investigator called to warn her that she was engaged in the unlicensed practice of real estate. To get a license, Sally would have had to spend three years apprenticing with a broker, pass two exams and open up her own physical office. Unable to afford those burdens, Sally was forced to shut down. Represented by the nonprofit law firm Institute for Justice (IJ), she sued, arguing that Pennsylvania’s heavy-handed real estate license violated her right to earn an honest living under the Pennsylvania Constitution.

In the opinion, the Commonwealth Court acknowledged that, “were Ladd to elect to comply with [these] requirements, she would face greater burdens in proportion to her real estate practice than those faced by a typical real estate broker.” Even so, the court held that the law was constitutional because it may hypothetically protect buyers and sellers of real estate by ensuring competence from professionals in the field.

IJ attorney Josh Windham, lead counsel on the case, said, “Sally doesn’t buy or sell houses, and it is absurd to make her jump through all of the regulatory hoops surrounding the sale of houses simply to coordinate vacation rentals on Airbnb. Pennsylvania’s law doesn’t protect the public—it protects licensed real-estate brokers from honest competition.”

In response to the ruling, Ladd has vowed to continue fighting. “Treating me like an old-fashioned real-estate broker just doesn’t make sense,” said Ladd. “The court didn’t seem to understand that, but that’s why we’re going to appeal. We aren’t going to rest until vacation-property managers and entrepreneurs throughout Pennsylvania see their constitutional rights properly protected.”

“This decision highlights the critical need for judicial engagement,” said IJ Senior Attorney Paul Sherman. “The Pennsylvania Constitution protects the right to earn an honest living, but that right is meaningless if judges are unwilling to enforce it. Thankfully, the Pennsylvania Supreme Court has a long history of engagement when economic liberty is at stake, and we expect the court to continue that tradition on appeal.”

For a brief video on the case, visit: https://ij.org/case/pennsylvania-property-management/

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