State Judge Rules Against The Town In Short-Term Rental Lawsuit

A Massachusetts Land Court judge has ruled against the town and a short-term rental operator on West Dover Street on two of three counts in the closely-watched lawsuit brought by Silver Street resident Cathy Ward against her neighbors and the Nantucket Zoning Board of Appeals (ZBA).

Judge Michael Vhay vacated the ZBA's Sept. 2024 decision that Peter and Linda Grape's short-term rentals were permissible under Nantucket's zoning bylaw and remanded the case for further consideration.

In his decision, Vhay ruled that "the current Nantucket Zoning Bylaw does not allow rentals shorter than 31 days of 'primary dwellings' in the Nantucket Residential Old Historic district, except for 'the rental of rooms within an owner-occupied dwelling  unit'."

A third count in the lawsuit, in which Ward asked the court for a so-called "writ of mandamus" directing the town to enforce the bylaw against the Grapes' short-term rentals, was dismissed by Judge Vhay. The ruling can be appealed.

Read Judge Vhay's decision here

Read Vhay's findings of fact & conclusions of law

Reached by the Current on Friday, Cathy Ward said she had not had a chance to speak to her attorney about the decision, and declined to comment. Nantucket's town counsel John Giorgio also declined to comment, stating, "We will be conferring with the Select Board about next steps. I have no further comment at this time."

The ruling marks the latest chapter in a years-long saga over the legality of short-term rentals on Nantucket because they are not expressly allowed in the island's zoning code, even though property owners have been renting their homes to vacationers for a century or more.

For the past five years, Nantucket government officials and citizens had attempted to end the legal limbo and neighbor vs. neighbor lawsuits by sponsoring warrant articles to codify short-term rentals in Nantucket's zoning code. But Town Meeting voters rejected such proposals six times. During the most recent Town Meeting in May, the latest attempt received majority support but did not reach the two-thirds majority threshold for passage, as Article 66 failed on a vote of 468 in favor and 321 opposed.

Ahead of that vote, Nantucket town counsel John Giorgio warned voters about this potential outcome. 

"It is in the best interests of the town - it’s actually imperative - that you solve this problem locally," Giorgio said ahead of the vote on Article 66. "Meaning here at Town Meeting. If you don’t, as I've said before, you’re leaving it in the hands of a judge in Boston to make this decision for you. That comes with a substantial amount of risk to the town, to homeowners, both seasonal and year-round residents."

Vhay's decision means short-term rentals under 31 days in the residential old historic (ROH) zoning district are now prohibited unless the owner lives in the home and only rents rooms, rather than the whole house. The ruling applies only to the ROH zoning district. 

View a high-resolution image of the Nantucket zoning map by clicking here. 

"It’s a far more damaging decision than the first one," Nantucket Planning Board chairman David Iverson said, referring to Judge Vhay's initial ruling in the case in March 2024. "I also don't think he’s wrong in saying that unless it’s expressly allowed in the zoning code, it’s not allowed. That’s our problem. They’re not legal. That’s the importance of putting a Y (yes) in the use chart and regulating through a general bylaw. It's frustrating. We’ve gone down this road and the decision shows the true intentions of ACK Now: It's not to protect locals' right to rent, it’s to stop all short-term rentals. I hope this motivates people. I’m not pro-STR. I want to create a regulatory system that works for the next generation and is not so cumbersome that those who come after us don't have the same challenges with regulations. So I think this is a troubling decision."

Iverson said town counsel John Giorgio had repeatedly advised that if the town received an adverse ruling, it could file an appeal to forestall the immediate impacts of the decision on rental contracts already signed for this summer. 

On Friday afternoon, the Select Board hastily called for a closed-door executive session with the Zoning Board of Appeals next Tuesday, June 10th at 4 p.m. to discuss strategy and, presumably, a potential appeal.

Ward's lawsuit was funded by ACK Now, the political action group founded by summer resident Peter McCausland that has been fighting to restrict and regulate short-term rentals since 2020. McCausland said Friday afternoon he had not yet read the full decision, but had been informed of its contents and considered it a win for ACK Now.

"The judge held that short-term rentals are not permitted in the residential district," McCausland said. "Our position was that short-term rentals are permitted as an accessory use, and we defended the right to rent. If it’s true, and I haven’t read it yet, it seems to me the judge probably made a correct decision. We were pushing articles to amend the zoning bylaw to allow people the right to rent their homes, but at the same time, would keep businesses out of residential districts. I’m thrilled that we won. In some respects, it exposes all the BS that’s been flying around from Planning Board members and ZBA members, and John Giorgio and private lawyers on Nantucket. They were all wrong about the Nantucket zoning bylaw.

"On the other hand, it would be the perfect time for all interested parties to sit down and hammer out a compromise," McCausland continued. "All the people on the ACK Now board are ready and willing to sit down and hammer out something. The real crux of the problem is, businesses don’t belong in residential districts. Period. A mini-hotel is a business."

In the days since Judge Vhay's ruling came down, more reaction has started to trickle in, and we've gathered additional comments below:

Penny Dey, the owner of Atlantic East Real Estate and a past president of the Nantucket Association of Real Estate Brokers, told the Current that Judge Vhay's decision raised more questions than answers, including how long-term or year-round rentals could potentially be impacted.

"All other types of rentals, although not yet challenged by Ms. Ward and ACK Now, are also not addressed in the Nantucket zoning bylaw," Dey said. "Does this mean that rentals of longer than 31 days - monthly rentals, seasonal rentals, winter or even year-round rentals - could also be legally challenged and found to be in violation? Leases already executed for this year are likely protected but what about in the future? What will the town be doing to enforce zoning going forward? If these rentals are in violation, how is it possible for the town of Nantucket and the Commonwealth of Massachusetts to continue regulating and taxing a use that is not legal?"