NEW JERSEY PUTS A TEMPORARY HOLD ON ALL SHORT-TERM RENTALS FOR SITES SUCH AS AIRBNB AND VRBO
On March 21, 2020, Governor Phil Murphy issued Executive Order No. 107, which closed to the public the brick-and-mortar premises of all non-essential retail businesses due to the COVID‑19 pandemic. It also deemed a subset of retail businesses as “essential” and permitted them to remain open during their normal business hours. The Governor also issued Executive Order No. 108 that same day. In a nutshell, Executive Order 108 allows municipalities or counites to impose additional restrictions in response to those established by Executive Order No. 107, under certain conditions.
Executive Order No. 108 invalidates “[a]ny county or municipal restriction imposed in response to COVID‑19 that in any way will or might conflict with any of the provisions of Executive Order No. 107.” This would, on its surface, forbid any county or local government from enacting restrictions harsher than those in Executive Order No. 107. However, Paragraph 3 of Executive Order No. 108, creates an exception to this language. Notably, the invalidation of any county or municipal order:
do[es] not apply to the following categories of entities, over which municipalities or counties have the ability to impose additional restrictions in response to COVID‑19 beyond the applicable provisions of Executive Order No. 107 (2020). The State Director of Emergency Management, who is the Superintendent of the State Police, shall have the discretion to make additions, amendments, clarifications, exceptions, and exclusions to this list:
- Online marketplaces for arranging or offering lodging; or
- Municipal or county parks.
In furtherance of Executive Order No. 108, the Division of New Jersey State Police Office of Emergency Order issued Administrative Order No. 2020-6. Paragraph 3 of Administrative Order No 2020-6 states:
it is hereby clarified that municipalities shall have the discretion to impose additional restrictions to local beaches and boardwalks in response to COVID‑19 beyond the applicable provisions of Executive Order No. 107.
Executive Order No. 108 and Administrative Order No. 2020-6 have effectively given New Jersey local governing bodies the right to place a stop on online short-term rentals, through sites such as AirBnB and VRBO. In addition, the Orders also gave local governing bodies the ability to make more restrictive rules than those established by the Orders.
As such, some municipalities and counties have made additional rules to further social distancing restrictions and the movement of people. Mayor Jay Gillian of Ocean County used the directives to stop online listing for short-term rentals on sites such as AirBnB. Specifically, Ocean County’s Emergency Order States at Paragraph 1:
Effective immediately, hotels, motels, vacation rentals (which shall include those properties rented directly by the owner or through any third party rental company or host platform) and other commercial lodging establishments shall not accept any occupants regardless of when the reservation was made or extend an existing reservation for persons other than Essential Lodgers. These restrictions shall remain in place through April 30, 2020.
The Township of Long Branch issued a similar order which states in part:
- The short-term rental of residential properties in the Township, which is defined as twenty one (21) days or less, is hereby prohibited and no rental agreements or arrangements of any kind, whether or not consideration is exchanged, shall be made by and between owners of residential property and any third parties in the Township for any occupancy of the properties between the date of this Order and May 1, 2020, or when the State rescinds restrictions in Executive Order 107, whichever occurs first; and
- All rental arrangements as aforesaid that are presently in effect are subject to the terms of this Order, and therefore are hereby declared terminated by operation of this Order…
Similar Emergency Orders have been issued by Townships across the State to restrict AirBnB and VRBO rentals. It is evident that these new directives by state officials will have a significant impact on landlords and renters across New Jersey. All pre-existing contracts for short-term rentals through sites such as AirBnB and VRBO have been made null and void and terminated. This technically means landlord with existing agreements might have to return deposits on rentals to their short-term renters as all agreements are effectively terminated. Since the rules, at least in the two examples above, are temporary, landlord will have to wait and see what their options are at the time when these restrictions are lifted. For now, no landlord in New Jersey may offer short-term rentals through sites such as AirBnB or VRBO while the respective Emergency Orders are in effect.
Paragraph H of Executive Order No. 108 states that “penalties for violations of this Order may be imposed under, among other statues N.J.S.A. App. A 9-49 and -50.” N.J.S.A. App. A 9-49 states in part that any person who shall:
- Violate any order, rule or regulation adopted by the Governor and promulgated as provider by this act; or
- Violate any other provision of this act declared herein to be unlawful--shall be adjudged a disorderly person and shall be subject to imprisonment for a term not to exceed 6 months or shall pay a fine not to exceed $1,000.00 or to both a fine and imprisonment, in the discretion of the court.
N.J.S.A App. A 9-50 goes on to say that:
Any person who shall knowingly aid or abet another in the violation of any provision of this act shall also be adjudged a disorderly person and punishable in the same manner as the violation aided or abetted.
It is to be noted that in some cases Townships Codes allow for additional penalties. Therefore, it is essential that landlords and tenants know the restrictions established by Emergency Orders in their communities in response to the COVID‑19 pandemic. Landlords who fail to abide by the Orders restricting online rental through sites such as AirBnB and VRBO run the risk of monetary fines and imprisonment. With the crisis being as deadly as it is, it is not unlikely that enforcement of these rules will be harsh. To ensure that you do not run afoul of the law, our team at Griffin Alexander is available to assist you in navigating these challenging times.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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