Nantucket Short-Term Rental Lawsuit Heads To Trial

Jason Graziadei •

The dust has not yet settled from the short-term rental debate at last week’s Special Town Meeting - when voters rejected a pair of bylaw proposals - but already the next chapter in the controversy is looming on the horizon.

A Massachusetts Land Court judge is expected to rule in December or early January on a Nantucket lawsuit that claims a short-term rental in a residential zoning district is an illegal commercial use.

For three straight years, Nantucket voters have declined to take up a series of proposed zoning bylaws that sought to clarify the questions surrounding the legality of short-term rentals on the island due to the fact they are not explicitly allowed in the zoning code. Now an off-island judge, the Hon. Michael D. Vhay, is poised to decide that difficult and complex issue for Nantucket.

Cathy Ward

The lawsuit - filed in February 2022 by island resident Cathy Ward against her neighbors Peter and Linda Grape - is the most advanced of three pending lawsuits related to short-term rentals on Nantucket. Ward’s case has been supported by ACK Now, the political action group that has been pushing for short-term rental restrictions over the past three years, and Ward is a member of the group’s advisory council.

The Grapes’ property on West Dover Street backs up to Ward’s home on Silver Street in the island’s residential old historic (ROH) zoning district. In her lawsuit, Ward argues that the Grapes’ short-term rental is a violation of the town’s zoning bylaw – specifically that a commercial use is not allowed in a residential district. That claim was previously rejected by both Nantucket building commissioner Paul Murphy and the Nantucket Zoning Board of Appeals, leading Ward to file the complaint with the Massachusetts Land Court.

Screen Shot 2022 02 10 at 10 09 03 PM
The Grapes' property on West Dover Street.

Ahead of last Tuesday night’s vote at the Special Town Meeting on the pair of short-term rental bylaw proposals, town counsel John Giorgio spoke to the scenario the town now finds itself in.

“If Article 2 is voted down, we are back where we started and this issue will likely be decided by the courts,” Giorgio said. “The one (lawsuit) that’s most advanced essentially is saying that a short-term rental even by a resident is a commercial use and therefore not allowed in any zoning districts where residential uses are permitted.”

After Ward’s motion for summary judgement in the case, oral arguments and testimony were given and a trial date has been set for Dec. 6 in Nantucket Superior Court. The trial will be solely to decide whether Ward has standing to bring her complaint, as Judge Vhay is expected to rule on the merits of the case shortly after the trial is completed.

The case is being closely watched by town officials, the island’s real estate community, short-term rental operators, and of course, ACK Now founder Peter McCausland.

“A lot is riding on that,” McCausland told the Current last week, shortly after the Town Meeting vote. “The judge has indicated he knows how he’s going to rule…I hope that he rules that a short-term rental is not a permitted principal use in a residential district in Nantucket, that it’s commercial. The Grapes, in terms of the time it’s occupied - 25 percent by owners and 75 percent by renters - it’s used more for renting than by the owners. So its principal use is commercial.

"I firmly believe short-term rentals are not good for the Nantucket community in terms of housing, the intensity of use on infrastructure and the environment and the destruction of neighborhoods," McCausland continued. "That’s why our board decided to take on the short-term rental issue. We’re just trying to help keep the community."

McCausland hopes the judge’s decision will be similar to the 2021 Massachusetts Supreme Judicial Court (SJC) decision involving short-term rentals known as the Lynnfield case, or the Styller case. That lawsuit reached the SJC after Alexander Styller, the owner of a home in Lynnfield, Mass., appealed a decision by the local building inspector that prohibited him from offering short-term rentals of his home based on the fact it was located in a residential zoning district. After losing at the local Zoning Board and the Land Court, Styller appealed to the SJC, which also ruled to uphold the building commissioner’s decision. The decision stated: “short-term rental use of a one family home is inconsistent with the zoning purpose of the single-residence zoning district in which it is situated, i.e., to preserve the residential character of the neighborhood.”

Nantucket Together, the political action non-profit group made up of seasonal and year-round residents who operate short-term rentals, is another group that is keeping a close eye on the lawsuit and the upcoming trial. Kathy Baird, a co-founder of the Nantucket Together group, said she expects the judge will rule on the zoning question whether he determines Ward has standing or not. Baird emphasized that the town’s legal costs associated with the ongoing litigation and the additional representation that will be necessary if Ward prevails is significant, and stated “those limited town resources could be better deployed on supporting other critical issues of the town…Since when are Nantucketers wanting to leave such big decisions to off-island judges and legislators?”

Baird said she was also concerned about whether the judge would understand the recent votes taken at Town Meeting, and how that might impact his ruling.

“With the failure to pass both articles, the nuances about why the zoning did not pass may be lost on the judge (we may be in the weeds and understand but the judge may not),” Baird wrote in an e-mail to the Current. “Will the judge interpret the failure to pass zoning that declares short-term rentals legal in all residential districts that comply with another article (that also failed), as the voters stating they do not want short-term rentals and they should be illegal? If so, we are very concerned."

While the ramifications of the judge’s ruling - especially if he sides with Ward and ACK Now - could be seismic for property owners and Nantucket’s economy, town counsel John Giorgio spelled out several possible responses that could be taken in the aftermath of such a decision.

“There would be time to react if a court somehow invalidates short-term rentals because he or she determines it’s a commercial use,” Giorgio said.

The town would have the ability to appeal the decision and take it up to the appellate level, he stated, and another special town meeting could be called within a short period of time to address the zoning issue. Assuming the high threshold of a two-thirds majority vote was reached, would that overrule the court’s decision?

“That’s a legislative act and if the town has determined to allow short-term rentals as a primary use, it wouldn’t overrule the court but it could make any decision by the court moot,” Giorgio said at the Special Town Meeting last week.

Earlier this year, an attorney representing Nantucket homeowners Ralph and Bonnie Keith filed a motion to intervene in the Ward case, which was allowed by Judge Vhay. The Keiths are the defendants in another short-term rental lawsuit filed against them by their neighbor Chris Quick, who is similarly challenging the use of Keiths' home as a short-term rental in a residential zoning district (in this case, the R1 zoning district).

The various “neighbor vs. neighbor” lawsuits all have similar characteristics. In Ward’s complaint, her attorney claimed that she is often unable to enjoy her property due to “frequent outdoor parties with groups of young men playing drinking games and blaring music so loudly that Ms. Ward cannot watch television or entertain guests in her home.” The lawsuit alleges on at least one occasion, a renter at the Grape’s home walked naked from the outdoor shower back into the residence. The guests have “little to no care or concern” for Ward and the proximity to her home, the lawsuit states.

“Particularly during the peak season months, this is a never-ending cycle for Ward,” it says.

The Grapes rent the West Dover Street home for up to $8,000 per week during the summer.

In the fall of 2021, Ward took her complaints to the island’s zoning enforcement officer, Marcus Silverstein, with an enforcement request that he determine the Grape’s property to be in violation of the town’s zoning bylaw – specifically that a commercial use is not allowed in a residential district. After the island’s building commissioner Paul Murphy ruled that there was no violation, Ward appealed his decision to the Zoning Board of Appeals. In November of that year, the ZBA voted to uphold Murphy’s decision, determining that short-term rentals operating in residential districts do not represent a violation of Nantucket’s zoning bylaw.

Several members of the Zoning Board of Appeals indicated they did not believe it was their role to “make policy” in the larger debate over short-term rentals by overturning Murphy’s denial of Ward’s zoning enforcement request. The ultimate decision on how the island should handle short-term rentals, they said, was better left to voters at Town Meeting.

In Ward and ACK Now’s appeal to Land Court, they allege that the ZBA’s decision was arbitrary and capricious, and that it had improperly interpreted the town’s zoning bylaw. The lawsuit seeks to have the ZBA ruling annulled and a judgement that the short-term rental on West Dover Street is unlawful.

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