S. Ladd v. Real Estate Commission of the Com. of PA, & DOS (BPOA) of the Com. of PA ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sara Ladd, Samantha Harris, :
and Pocono Mountain Vacation :
Properties, LLC, :
Petitioners :
:
v. : No. 321 M.D. 2017
: Argued: June 7, 2021
Real Estate Commission of the :
Commonwealth of Pennsylvania :
and Department of State (Bureau :
of Professional and Occupational :
Affairs) of the Commonwealth of :
Pennsylvania, :
Respondents :
BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
HONORABLE J. ANDREW CROMPTON, Judge (P.)
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY PRESIDENT JUDGE BROBSON FILED: December 22, 2021
I. INTRODUCTION
This original jurisdiction matter returns to us on remand from the
Pennsylvania Supreme Court. In Ladd v. Real Estate Commission, 230 A.3d 1096(Pa. 2020) (Ladd II), the Supreme Court, applying the heightened rational basis test
first articulated in Gambone v. Commonwealth, 101 A.2d 634 (Pa. 1954), held that
the allegations set forth in Petitioners’ petition for review (Petition) presented a
colorable claim that it is unconstitutional to apply the broker licensing requirements
in the Real Estate Licensing and Registration Act (RELRA)1 to Petitioner Sara Ladd
1
Act of February 19, 1980, P.L. 15, as amended, 63 P.S. §§ 455.101-.902.
(Ladd) and her business as a “short-term vacation property manager.” Ladd II,
230 A.3d at 1115 n.19, 1116. In so doing, the Supreme Court reversed this Court’s
dismissal of the Petition on a demurrer and remanded the matter to this Court for
further proceedings.
Following a period of discovery, the matter is again before the Court, this time
on cross-applications for summary relief. In addition, Petitioners have filed a
separate application, asking this Court to strike as hearsay a document that
Respondents Pennsylvania State Real Estate Commission (Commission) and
Pennsylvania Department of State, Bureau of Professional and Occupational Affairs
(BPOA) (collectively, Respondents) filed in support of their application for
summary relief. For the reasons set forth below, genuine issues of material fact
prevent this Court from granting summary relief to either party. Accordingly, we
will deny the cross-applications for summary relief and dismiss the application to
strike as moot.
II. BACKGROUND
A. Statutory Framework
As recently articulated by the Supreme Court in Ladd II, the legislative
purpose of RELRA is to protect the public from fraudulent conduct by those that
engage in the business of trading real estate. Ladd II, 230 A.3d at 1110-11. Relevant
here are RELRA’s provisions relating to brokers. The statute defines a “broker” as
follows:
Any person who, for another and for a fee, commission or other
valuable consideration:
(1) negotiates with or aids any person in locating or
obtaining for purchase, lease or an acquisition of interest in any
real estate;
2
(2) negotiates the listing, sale, purchase, exchange,
lease, time share and similarly designated interests, financing or
option for any real estate;
(3) manages any real estate;
(4) represents himself to be a real estate consultant,
counsellor, agent or finder;
(5) undertakes to promote the sale, exchange, purchase
or rental of real estate; Provided, however, [t]hat this provision
shall not include any person whose main business is that of
advertising, promotion or public relations;
(5.1) undertakes to perform a comparative market
analysis; or
(6) attempts to perform any of the above acts.
Section 201 of RELRA, 63 P.S. § 455.201. RELRA makes it unlawful for any
person to act as a broker in the Commonwealth without first being licensed or
registered under the law. Section 301 of RELRA, 63 P.S. § 455.301. There are,
however, eleven categories of persons excluded from RELRA’s licensing
requirements. Section 304 of RELRA, 63 P.S. § 455.304.
Before applying for a broker’s license, a prospective applicant must take and
pass a broker’s license exam. Section 511 of RELRA, 63 P.S. § 455.511. To be
eligible to sit for the exam, the prospective applicant must meet the following
qualifications: (1) be at least 21 years of age; (2) be a high school graduate or its
equivalent; (3) have completed 240 hours of real estate instruction as prescribed by
the Commission; and (4) have at least 3 years of experience as a licensed real estate
salesperson or the equivalent thereof. Id. Upon satisfying these requirements and
qualifications, the prospective applicant may apply to BPOA for a broker’s license.
Section 512 of RELRA, 63 P.S. § 455.512. Each licensed broker must maintain a
fixed office within the Commonwealth, which is designated on the broker’s license.
Section 601(a) of RELRA, 63 P.S. § 455.601(a). If a broker desires to maintain
3
more than one office, the broker must obtain a separate license for each location.
Section 601(b) of RELRA, 63 P.S. § 455.601(b).
B. Petition and Ladd II
Petitioners include Ladd, Samantha Harris (Harris), who is one of Ladd’s
clients, and Pocono Mountain Vacation Properties, LLC (PMVP), Ladd’s New
Jersey-domiciled business. On July 17, 2017, Petitioners filed their Petition with
this Court, seeking both declaratory and permanent injunctive relief. In their
Petition, Petitioners allege that Ladd is in the business of managing short-term
vacation rentals in the Pocono Mountains, which Petitioners define as “rentals for
periods of fewer than thirty days.” (Pet. ¶ 2 n.1.) Nonetheless, Petitioners allege
that since starting PMVP, most of Ladd’s services “have involved . . . rentals for
periods of just a few days at a time . . . at rates of just a few hundred dollars at a
time.” (Id. ¶¶ 31-32.) Ladd runs her business almost exclusively from her home in
New Jersey. (Id. ¶ 24.)
Petitioners allege that through her business, Ladd handles all of the marketing
and logistics for property owners who wish to rent out their properties in the Pocono
Mountains. (Id. ¶ 25.) Her clients execute a property management contract, which
sets forth the terms of Ladd’s arrangement with her clients, including the scope of
the services that will be provided and the clients’ obligations in return. (Id. ¶ 26.)
Petitioners did not attach a copy of the property management contract to their
Petition. They allege, however, that Ladd’s “typical[]” services include, “but are not
limited to:”
a. Serving as an independent contractor only for the property
owner, with complete exclusion from the contractual relationship
between the owner and each renter;
4
b. Marketing the owner’s property on the Internet—chiefly, on
platforms like her own website, Airbnb, HomeAway, FlipKey,
and VRBO;
c. Responding to all online inquiries and coordinating all bookings
based on a pre-approved list of openings provided by the owner;
d. Handling all billing, which can include accepting rental
payments and security deposits, subtracting administrative costs
and her own commissions, refunding security deposits, and
remitting payments to the owners; and
e. Facilitating cleanings of the property between renters.
(Id. ¶ 27.) Petitioners allege that, in return, the clients incur the following
obligations:
a. Providing [Ladd] with a rental contract that will constitute the
exclusive terms of the arrangement between the property owner
and each renter;
b. Providing [Ladd] with a list of dates that she is allowed to book
the property over the next twelve months[] and acknowledging
that dates not specifically reserved by the property owner upfront
or submitted in writing at a later date are open for booking;
c. Not double-booking the property and notifying [Ladd]
immediately if the property has been booked outside the scope
of the arrangement;
d. Working with [Ladd] to establish rental rates with which the
owner is comfortable;
e. Certifying that the property complies with all applicable laws,
regulations, codes, and homeowners’ association rules;
f. Paying any state or local sales tax imposed on short-term rentals,
as well as any federal, state, and local taxes on rental proceeds;
g. Maintaining short-term rental liability insurance for the property
in a minimum amount of $1,000,000;
h. Providing [Ladd] with a list of all house rules, instructions, and
an inventory list for cleaners; and
i. Providing household supplies and items in accordance with how
the property was advertised.
5
(Id. ¶ 28.) Since discovering in 2015 that Pennsylvania’s “hotel tax” applied to her
own property rentals, Ladd also advised her clients of their obligation to pay the tax
on their rentals. (Id. ¶ 34.)
Petitioners allege, upon information and belief, that most residential brokers
in Pennsylvania focus on selling homes and engaging in longer-term, more complex
rental transactions. (Id. ¶¶ 35-38.) Ladd’s focus on short-term vacation property
management with only a few clients at once allows Ladd to keep her clients’
properties more consistently booked. (Id. ¶ 39.) Her low overhead allows her to
provide these services to her clients at a lower price. (Id. ¶ 40.)
Petitioners maintain that RELRA, as applied to Ladd’s business, violates her
substantive due process rights under Article I, Section 1 of the Pennsylvania
Constitution,2 which includes, within the right to possess property and pursue
happiness, the right to pursue a chosen occupation, because it does not bear a real
and substantial relationship to the protection of public health, safety, and welfare.
Ladd II, 230 A.3d at 1108 (citing Nixon v. Cmwlth., 839 A.2d 277, 288 (Pa. 2003)).
In response to preliminary objections filed by Respondents, this Court, in Ladd v.
Real Estate Commission, 187 A.3d 1070 (Pa. Cmwlth. 2018) (Ladd I), reversed,
230 A.3d 1096 (Pa. 2020), sustained a preliminary objection in the nature of a
demurrer, concluding that RELRA’s licensing scheme to protect buyers and sellers
of real estate did not violate Ladd’s rights under Article I, Section 1 of the
2
Article I, Section 1 of the Pennsylvania Constitution provides:
All men are born equally free and independent, and have certain inherent
and indefeasible rights, among which are those of enjoying and defending life and
liberty, of acquiring, possessing and protecting property and reputation, and of
pursing their own happiness.
6
Pennsylvania Constitution. Ladd I, 187 A.3d at 1077-79. We dismissed the case,
and Petitioners appealed. Id. at 1079.
In Ladd II, the Supreme Court reversed, holding, in a matter of first
impression, that Ladd raised a colorable claim that RELRA’s licensing scheme for
brokers, as applied to Ladd’s self-described services, is unconstitutional. Ladd II,
230 A.3d at 1116. In so doing, the Supreme Court recognized that “the right to
choose a particular occupation, although ‘undeniably important,’ is not
fundamental” or “absolute[,] and its exercise remains subject to the General
Assembly’s police powers, which it may exercise to preserve the public health,
safety, and welfare.” Id. at 1108. The Supreme Court further recognized that “[a]
claim, like Ladd’s, that a Pennsylvania statute violates substantive due process is
subject to a ‘means-end review[,]’ where the court ‘weigh[s] the rights infringed
upon by the law against the interest sought to be achieved by it, and also scrutinize[s]
the relationship between the law (the means) and that interest (the end).’” Id.
(alterations in original) (quoting Nixon, 839 A.2d at 286-87). Given that the right to
pursue a chosen occupation is not fundamental, the Supreme Court noted that it
would conduct this means-end review by applying the rational basis test. Id.
Applying Pennsylvania’s less deferential, “more restrictive,” rational basis
test, as first articulated in Gambone,3 the Supreme Court asked two questions:
3
As articulated in Gambone,
a law which purports to be an exercise of the police power must not be
unreasonable, unduly oppressive or patently beyond the necessities of the case, and
the means which it employs must have a real and substantial relation to the objects
sought to be attained. Under the guise of protecting the public interests the
legislature may not arbitrarily interfere with private business or impose unusual and
unnecessary restrictions upon lawful occupations. The question whether any
particular statutory provision is so related to the public good and so reasonable in
the means it prescribes as to justify the exercise of the police power, is one for the
7
(1) whether RELRA’s real estate broker licensing requirements—
apprenticeship, instructional coursework and examinations, and brick
and mortar location—are “‘unreasonable, unduly oppressive, or
patently beyond the necessities of the case[;]’” and (2) whether those
requirements bear a “‘real and substantial relation’” to the public
interest they seek to advance when applied to Ladd under the
circumstances alleged in her [petition for review].
Id. at 1109 (alteration in original) (emphasis added) (quoting Nixon, 839 A.2d at 287
(quoting Gambone, 101 A.2d at 637)).4 While acknowledging the strong
presumption that a statutory scheme is constitutional, the Supreme Court concluded
that the allegations set forth in the Petition, when accepted as true, “present a
colorable claim that RELRA’s [broker licensing] requirements, as applied to
[Ladd’s] self-described services, are unreasonable, unduly oppressive[,] and patently
beyond the necessities of the case” and that it is not clear whether those requirements
“without a doubt . . . bear a real and substantial relation to the statutory goal of
protecting the public” from “the fraudulent conduct of those ‘engaged in the business
of trading real estate.’” Id. at 1109-10, 1111, 1116 (quoting Meyer v. Gwynedd Dev.
Grp., Inc., 756 A.2d 67, 69 n.2 (Pa. Super. 2000)). The Supreme Court reasoned:
Ladd is . . . faced with 315 hours of coursework (75 hours for her
salesperson license and 240 for her broker license) in various topical
areas that pertain to the work of traditional real estate brokers, but not
to the services contemplated by her unique business model. The only
judgment, in the first instance, of the law-making branch of the government, but its
final determination is for the courts.
Gambone, 101 A.2d at 637; see also Shoul v. Dep’t of Transp., Bureau of Driver Licensing,
173 A.3d 669, 677-78 (Pa. 2017) (recognizing Gambone as setting more restrictive rational basis
test under Pennsylvania Constitution than applied in due process challenges under United States
Constitution).
4
The Supreme Court expressly rejected our reading of Nixon and Gambone as applying
only to regulatory regimes that imposed absolute bars or complete prohibitions on certain
individuals engaging in a profession. Ladd II, 230 A.3d at 1110. In doing so, the Supreme Court
held that the heightened Gambone rational basis test applied to any instance where the General
Assembly exercises its police powers “to curtail a non-fundamental right.” Id.
8
topics listed that are arguably related to her services are the general
two-credit “Commission-developed or approved law course” and
maximum four-credit “Real Estate Law” and “Residential Property
Management” courses which satisfy at most 150 hours of the
315[-]hour requirement. In other words, RELRA requires Ladd to
complete 165 hours of coursework geared toward educating individuals
about large scale transactions including buying, selling, and leasing
residential and commercial real estate. Further, because the broker
coursework cannot be completed until the salesperson coursework and
apprenticeship are satisfied, Ladd’s burden is substantially increased
because she would have to forego her own PMVP profits for three years
while she completes the licensure requirements. Applying this metric
to the allegations of Ladd’s [petition for review], taken as true, we
conclude she has asserted a colorable claim that RELRA’s instructional
requirements, as applied to her, are an unreasonable and unduly
oppressive means to achieve the statutory objective of protecting
consumers from the fraudulent practices of those “engaged in the
business of trading real estate.”
. . . RELRA imposes an apprenticeship and a
brick[-]and[-]mortar office requirement in addition to an instructional
coursework requirement, which obviously increases the economic
burden. Considering both the quantity of non-relevant hours and the
cost of completing those hours, . . . the three-year apprenticeship
requirement would impose a substantial cost on Ladd; during that time
she would ostensibly learn the traditional real estate trade, e.g.,
completing transactions involving thousands, if not hundreds of
thousands of dollars to buy, sell, or lease properties. But, this practical
knowledge would be neither relevant nor directly applicable to a
short-term vacation property management business involving rentals
that last only a few days and cost only a few hundred dollars. Adding
to the equation the lost opportunity cost of shuttering PMVP during the
apprenticeship, we conclude Ladd has stated a claim that the broker
license requirements are unreasonable, unduly oppressive and patently
beyond the necessities of the case.
Similarly, we conclude the brick[-]and[-]mortar office
requirement, as applied to Ladd’s self-described business model,
appears to be disproportionate to the government’s interest in
safeguarding the public from fraudulent practices by those who “trad[e]
in real estate.” According to Ladd, she performed her professional
services solely online from her home in New Jersey . . . and a
requirement that she obtain physical office space in Pennsylvania is
tantamount to an excessive fee for entry into a profession. The
9
allegations of Ladd’s [petition for review]—taken as true—indicate her
business model is sustainable only because she can provide quality
services with limited overhead . . . and requiring additional overhead,
including rental or mortgage, taxes, insurance, and maintenance of a
property does not further the statutory objectives of RELRA.
....
We are further persuaded that it appears application of RELRA
to Ladd is unconstitutional when we consider the fact that individuals
who manage and facilitate rentals of lodging in apartment complexes
and duplexes on behalf of their owners are completely exempt from the
statute’s broker licensing requirements . . . and those who manage and
facilitate rentals in hotels do not fall under the terms of RELRA at all.
It is clear Ladd’s business model—as described in her [petition for
review]—is more closely analogous to the services provided by these
exempt individuals than to those of a broker, despite the fact that the
statutory definition of “broker” technically catches Ladd in its net.
Notably, Ladd routinely advised her clients they must comply with the
Commonwealth’s “hotel tax,” . . . where “hotel” is defined as any form
of lodging “available to the public for periods of time less than 30
days.” Ladd’s “short-term vacation rental” clients were subject to the
hotel tax because their contracts involved “transient” uses of property
only. Under the circumstances, Ladd asserts a colorable argument that
it is unreasonable, unduly oppressive and patently beyond the
necessities of the case . . . to exempt professions so closely analogous
to her own while mandating her compliance with RELRA’s onerous
broker license requirements.
Id. at 1112-15 (emphasis omitted) (footnotes omitted) (citations omitted) (alteration
in original). Given its conclusions and reasoning, the Supreme Court reversed our
decision in Ladd I and remanded the matter to us for further proceedings pursuant to
its opinion. Id. at 1116.
III. SUMMARY RELIEF STANDARD
“At any time after the filing of a petition for review in an appellate or original
jurisdiction matter, the court may on application enter judgment if the right of the
applicant thereto is clear.” Pa. R.A.P. 1532(b). Like motions for summary
judgment, a motion for summary relief must be based on undisputed material facts
10
of record. See Summit Sch., Inc. v. Dep’t of Educ., 108 A.3d 192, 195-96
(Pa. Cmwlth. 2015). A court “must determine, based on the undisputed facts,
whether ‘either party has a clear right to the relief requested.’” Id. at 195 (quoting
Bell Atl.-Pa., Inc. v. Tpk. Comm’n, 703 A.2d 589, 590 (Pa. Cmwlth. 1997), aff’d,
713 A.2d 96 (Pa. 1998)). “The moving party has the burden of proving the
nonexistence of any genuine issue of fact.” Thompson Coal Co. v. Pike Coal
Co., 412 A.2d 466, 468-69 (Pa. 1979). “A material fact is one that directly affects
the outcome of the case.” Dep’t of Env’t Prot. v. Delta Chems., Inc., 721 A.2d 411,
416 (Pa. Cmwlth. 1998) (en banc) (Delta Chems.); see also Hosp. & Healthsystem
Ass’n of Pa. v. Cmwlth., 77 A.3d 587, 602 (Pa. 2013) (“A fact is considered material
if its resolution could affect the outcome of the case under the governing law.”).
The Supreme Court has cautioned that when “the parties’ disparate takes on
the record and the interpretations they draw from it suggest[] there are disputed
issues of material fact . . . when viewed in the light most favorable to . . . the
non-moving party, [the court] should . . . preclude[] summary [relief].” Bailets v.
Pa. Tpk. Comm’n, 123 A.3d 300, 307 (Pa. 2015). “In summary [relief] proceedings,
. . . the court’s function [is not] to determine facts[] but only to determine if a
material issue of fact exists.” French v. United Parcel Serv., 547 A.2d 411, 415
(Pa. Super. 1988).5 Finally, “[t]he facts which directly affect the outcome of the case
are gleaned from considering the substantive law underlying the cause of action.”
Delta Chems., 721 A.2d at 416.
5
We are “not bound by the [Pennsylvania] Superior Court’s precedents, although where
persuasive, we are free to adopt the Superior Court’s reasoning.” Wertz v. Chapman Twp.,
709 A.2d 428, 433 n.8 (Pa. Cmwlth. 1998), aff’d, 741 A.2d 1272 (Pa. 1999).
11
IV. DISCUSSION
A. Petitioners’ Application for Summary Relief
Petitioners argue that “the Supreme Court all but decided this case” in Ladd II
and, because RELRA has not changed since the Supreme Court issued its decision
and it is undisputed that Ladd only wants to manage short-term rentals online, the
only thing left for this Court to do “is follow the Supreme Court’s logic on the merits
and declare RELRA unconstitutional as applied to [Ladd].” (Petitioners’ Br.
at 23-26.) More specifically, Petitioners contend that RELRA, as applied to Ladd,
does not bear a “real and substantial relation” to its intended purpose of “protect[ing]
the public from fraud by those engaged in the business of trading real estate” because
RELRA’s apprenticeship, coursework/examination, and brick-and-mortar office
requirements are unrelated to Ladd’s short-term rental business. (Petitioners’ Br.
at 24, 26-31 (quoting Ladd II, 230 A.3d at 1109, 1110).) Petitioners further contend
that RELRA is unreasonable, unduly oppressive, and patently beyond the necessities
of the case as applied to Ladd, because RELRA grants other brokers unchecked
power over Ladd’s ability to obtain a broker license, imposes economic burdens on
Ladd by forcing her to spend years to learn mostly irrelevant information when she
could be earning a living and requiring her to have a brick-and-mortar office in
Pennsylvania, and exempts individuals “who manage and facilitate rentals of
lodging in apartment complexes and duplexes” and individuals “who manage and
facilitate rentals in hotels” from its requirements. (Petitioners’ Br. at 32 (quoting
Ladd II, 230 A.3d at 1114).) Petitioners maintain that the only material facts
presented in this case are “RELRA’s ‘specific application to . . . short-term vacation
property management services’ and the ‘economic burdens’ RELRA imposes on
[Ladd]” and that those facts are not in dispute. (Petitioners’ Reply Br. at 4 (quoting
12
Ladd II, 230 A.3d at 1109, 1111-15).) In support thereof, Petitioners suggest that
any facts of record relative to how Ladd may have conducted her business in the
past—e.g., participating in a few long-term rentals, advising a client on a property
sale, and maintaining complete control over rental dates and rental rates—are
essentially irrelevant to this Court’s determination on summary relief because it is
undisputed that Ladd only intends to manage short-term rentals in the future.
While we acknowledge that we are bound by the Supreme Court’s decision in
Ladd II and that we must apply the legal framework set forth therein to analyze
whether it is unconstitutional to apply RELRA’s broker licensing requirements to
Ladd under the facts presented here, we do not agree with Petitioners that summary
relief in their favor is appropriate at this time. Petitioners focus their argument
entirely on the ways in which RELRA’s broker licensing requirements are unrelated
to its purpose of protecting the public from fraud when applied to short-term vacation
property management and how RELRA’s broker licensing requirements are
unreasonable, unduly oppressive, or patently beyond the necessities of the case when
applied to short-term vacation property management. In other words, Petitioners
have essentially reiterated the potential problems with applying RELRA to
short-term vacation property management that the Supreme Court identified in
Ladd II. See Ladd II, 230 A.3d at 1112-15.
Petitioners fall short, however, by not demonstrating, through undisputed
evidence of record, that Ladd’s business model actually constitutes that of a
“short-term vacation property manager,” and the scope and limits of such a business.
Petitioners baldly assert, without any citation to the record, that it is undisputed that
Ladd “just wants to manage short-term rentals online.” (Petitioners’ Br. at 23.) At
this stage of the proceedings, we are no longer required to “accept as true
13
[Petitioners’] allegation that [Ladd] is a short-term property manager where
‘short-term’ is defined as a period less than thirty days.” Ladd II, 230 A.3d at 1109.
Rather, to be entitled to summary relief, Petitioners must demonstrate “the
nonexistence of any genuine issue of [material] fact.” Thompson Coal Co., 412 A.2d
at 468-69. Petitioners have utterly failed in this regard and, instead, would like this
Court to simply take Ladd at her word, without any factual support, that she intends
to only manage short-term vacation rentals, whatever that encompasses. For these
reasons, we must deny Petitioners’ application for summary relief.
B. Respondents’ Application for Summary Relief
Respondents argue that the undisputed evidence of record demonstrates that
RELRA’s broker licensing requirements, as applied to Ladd, are not unreasonable
or unduly oppressive and bear a real and substantial relation to protecting the public
from fraud and, therefore, Respondents are entitled to summary relief. Respondents
maintain that “[t]he Supreme Court’s opinion is premised upon Petitioners’ false
representations that . . . Ladd engaged [in] simple internet ‘marketing’ for
‘short[-]term vacation rentals’ lasting thirty days or less[] and that she is not involved
in leasing,” when, in actuality, “Ladd, who has no training in law or real estate, . . .
entered into complicated contractual relationships with her clients that gave her
paramount control over their properties for an initial term of a year (with automatic
renewal) and directly involved her in the leasing process.” (Respondents’ Br.
at 20-21.) In support thereof, Respondents direct our attention to the following facts,
which Respondents contend are undisputed: (1) Ladd maintained extensive control
over her clients’ properties and the leasing process pursuant to complicated property
management contracts; (2) Ladd did not limit all of her clients’ rental agreements to
thirty days or less; (3) Ladd handled significant amounts of money on her clients’
14
behalf and that money may not have been placed into an escrow account; and
(4) Ladd had serious disputes with two of her five clients. Respondents further
maintain that, given the breadth of Ladd’s vacation rental business, RELRA’s
coursework, apprenticeship, and brick-and-mortar office requirements are not
unreasonable, burdensome, or unduly oppressive.
The parties here have advanced very different presentations of Ladd’s
vacation rental business. Petitioners maintain that Ladd “just wants to manage
short-term rentals online” and that how Ladd may have managed her vacation rental
business in the past has no bearing on her intention to manage only short-term, online
rentals in the future. Respondents, on the other hand, essentially suggest that the
evidence of record establishes that Ladd’s business involved more than that of a
“short-term vacation property manager.” Frankly, given the parties’ current
positions, we are concerned that Ladd’s self-described services are markedly
different than what Petitioners described in their Petition and presented to the
Supreme Court for the purposes of surviving preliminary objections.
Before we can apply the legal framework set forth by the Supreme Court in
Ladd II to determine whether RELRA’s broker licensing requirements, as applied to
Ladd, violate Ladd’s substantive due process rights under Article I, Section 1 of the
Pennsylvania Constitution, we must have a clear view of the relevant facts, including
the nature of Ladd’s vacation rental business. As a result, we must conclude that
genuine issues of material fact exist and deny Respondents’ application for summary
relief.6
6
Given our disposition above, we also dismiss Petitioners’ application to strike as moot.
In the event that the parties continue to disagree over the admissibility of the document, Petitioners
can make an appropriate objection prior to or at trial.
15
V. CONCLUSION
Accordingly, we deny Petitioners’ and Respondents’ cross-applications for
summary relief and dismiss Petitioners’ application to strike inadmissible hearsay as
moot.
P. KEVIN BROBSON, President Judge
16
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sara Ladd, Samantha Harris, :
and Pocono Mountain Vacation :
Properties, LLC, :
Petitioners :
:
v. : No. 321 M.D. 2017
:
Real Estate Commission of the :
Commonwealth of Pennsylvania :
and Department of State (Bureau :
of Professional and Occupational :
Affairs) of the Commonwealth of :
Pennsylvania, :
Respondents :
ORDER
AND NOW, this 22nd day of December, 2021, Petitioners’ and Respondents’
cross-applications for summary relief are DENIED, and Petitioners’ application to
strike inadmissible hearsay is DISMISSED AS MOOT.
P. KEVIN BROBSON, President Judge