J. Justin Wilson
J. Justin Wilson · October 31, 2022

Today, Judge Stacy Wallace of the Commonwealth Court of Pennsylvania ruled that the state’s real estate commission violated the Pennsylvania Constitution when it attempted to require vacation property manager Sally Ladd to get a real estate license simply to manage short-term vacation rental properties in the Poconos. The court ruled that the evidence presented at a July 2022 trial showed that, as applied to managers of short-term rental properties like Ladd, the state’s “licensing requirements are unreasonable, unduly oppressive, and patently beyond the necessities of the case.” 

The ruling is a complete vindication for Sally Ladd, who began managing short-term vacation rentals for property owners in the Poconos after word spread of her success managing her own rental properties. Although her business had been a success, in 2017 an investigator from the state real estate commission informed Sally that she needed a full real-estate license to manage property rentals. With no other options, Sally was forced to close her business.

“I had really hoped that managing these rental properties could provide me with a steady source of income into my golden years,” said Sally. “But getting fully licensed as a real-estate broker would have required that I complete a three-year apprenticeship working for a licensed broker, that I complete courses and take tests that have nothing to do with short-term rentals, and that I open a physical office in Pennsylvania that I would never use. I’m gratified the court saw that what happened to me wasn’t just wrong, it was unconstitutional.”

The trial court’s ruling comes after the Pennsylvania Supreme Court ruled in 2020 that Pennsylvania’s Constitution provides a greater level of protection for economic liberty—the right to earn an honest living free from unreasonable government regulation—than does the federal constitution. Following that ruling, the Commonwealth Court ordered a trial to determine whether Pennsylvania’s law (referenced in the opinion as “RELRA”) made sense as applied to Sally’s services. Today’s ruling found that it did not:

RELRA’s broker licensure requirements of hundreds of hours of real estate coursework, a three-year apprenticeship, and the broker examination are all minimally related, at best, to Ladd’s short-term property management services. RELRA’s requirements are well beyond the necessities of this case. Forcing Ladd to comply with RELRA’s requirements in no way advances the General Assembly’s goal of public protection.

“Today’s ruling is a victory for entrepreneurs and common sense,” said Josh Windham, an attorney at the Institute for Justice (IJ), which represents Ladd. “When the court looked at the facts, it became clear that Pennsylvania’s real-estate licensing scheme had nothing to do with the sort of short-term vacation rentals that Sally managed and that the state had plenty of ways to protect consumers that were less burdensome than full-blown licensure.”

Under the ruling, the state is prohibited from enforcing the state’s real-estate licensing scheme against Sally so long as she limits her services to managing rentals of fewer than 30 days.

“Today’s ruling lets me do everything that I wanted to do,” said Sally. “I never had any interest in buying or selling property or managing long-term leases. But I saw a need in the marketplace for someone who could help property owners manage their vacation rentals. I liked the work, I was good at it, and I’m overjoyed that this ruling will let me do it again.”

Founded in 1991, IJ is the national law firm for liberty. IJ litigates nationwide on behalf of economic liberty, freedom of speech, property rights and educational choice.