Under the Definitions Provided by the Conway Zoning Ordinance, Short-term Rentals are Allowed in the Residential District.

Town of Conway v. Kudrick
New Hampshire Supreme Court Case No. 2022-0098
Tuesday, May 2, 2023

The defendant owns several properties in the residential district of the Town of Conway that he rents for periods of time as short as a single night. In June 2021, the Town sought a declaratory judgment ruling in superior court that the zoning ordinance prohibits short-term rentals (STRs) like these in residential districts if the rentals are not owner-occupied. The superior court ruled against the Town and the Town appealed.

The appeal before the Supreme Court presented a single issue: whether the zoning ordinance permits non-owner occupied STRs in residential districts based on the meaning of the term “residential/dwelling unit” as defined by the ordinance. Importantly, that definition required that the persons occupying the dwelling unit were “living as a household,” and the Court’s determination as to whether STRs were allowed in that zone required an analysis of the meaning of that phrase.

In examining the question, the Court held that “[i]t is the occupants’ use of the property, however, not the owner’s, that dictates how the property is being used.” Therefore, the relevant question was not how the owner of the property treated its use, but how the occupants of the property treated its use. In looking to the activities of those occupying the defendant’s property as compared to other properties, the Court found that “the occupants of the defendant’s properties exclusively engage in residential activities” and “the duration for which a property is used does not impact whether the property is used for residential purposes.”

The dissent disagreed that duration does not impact use. However, the concurring opinion addressed the dissent’s argument by stating that “land use regulations require clarity to inform landowners of uses that are permitted and not permitted ...Where, as here, there are many ways to define a household, it is imperative that we focus on the activities taking place on the land, rather than the identity of the individuals conducting them. Any ambiguity arising from language chosen for the regulation of land use should be resolved in favor of vindicating a landowner’s property rights.”  


Additional Information: 

Practice Pointer: Municipalities wishing to regulate STRs should review their zoning ordinances to determine whether the terms used are sufficiently clear that an average person will understand what qualifies as an STR and where STRs are and are not allowed within the municipal boundary.  Municipalities should follow the lead of the City of Portsmouth in Working Stiff v. Portsmouth, 172 N.H. 611 (2019) and define “dwelling unit” as "[a] building or portion thereof providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation. This use shall not be deemed to include such transient occupancies as short-term rentals, hotels, motels, rooming or boarding houses.”  It would also be prudent to define the word transient - here is one example:  “A dwelling unit where lodging is provided for compensation for stays of between one and 14 consecutive nights, and where the dwelling unit would normally be considered a residential living unit not associated with regulated commercial activities such as a hotel, motel, rooming/boarding/lodging house, or bed-and-breakfast.”