City ordinances can impact both the rental units owners and the persons wanting to rent those units.
In a recent case, cities have been deemed exempt from California’s Unruh Civil Rights Act. The Unruh Civil Rights Act prohibits a business establishment from discriminating in housing or other accommodations.
In Harrison v. City of Rancho Mirage, the City passed an ordinance that required a “responsible person” to sign any contract for a short term rental, and defined responsible person as someone older than 30. The City’s intent was to reduce the negative effects of short term rental sites such as Airbnb and VRBO which facilitated a massive increase in home rentals and the accompanying code enforcement issues, such as parking problems, noise violations, and trash collection.
The owner of a condominium complex in the city, Brian Harrison, sued alleging that the City’s ordinance required him to discriminate on the basis of age.
The city argued that the Unruh Act did not apply to legislative enactments of a local government and the trial court agreed. The basis for the city’s argument and the trial court’s decision was that the ordinance does not prohibit all persons under the age of 30 from occupying a vacation rental, but rather that the “responsible party” who signs the short term rental agreement be over 30. The appellate court agreed, finding that nothing in the Unruh Act precludes legislative bodies from enacting ordinances that make “age distinctions” between adults. Further, the court held that because the city was not acting as a business establishment, but was rather amending an existing municipal code section to increase the minimum age of a responsible person, the Unruh Act did not apply.
Before your invest in rental property or commence leasing rental property review the City or County ordinances in which your rental property is located.
Liam Perry is an Associate Attorney at The Loftin Firm. For questions relating to this blog post or any other California real estate, land use, corporate, or estate planning matter, contact The Loftin Firm at 760-814-9649.