Do I have to get a Permit if my Short-Term Rental is “Grandfathered In”?

In response to a new Wisconsin state law that prohibits municipalities from banning short-term rentals, some municipalities are requiring permits. Some municipalities are charging obscenely expensive—perhaps unconstitutional?—permit fees. Yet, many property owners used their properties for short-term rentals before any permit regulations passed. Can the municipality require a property owner to obtain a permit to continue using their property for short term rentals?

What is a Grandfather Right?

First, it is important to understand what a grandfather right is. Property owners must establishes a “pre-existing non-conforming use,” legal terminology for “I was legally using my property in way that is now illegal due to the new law.” A legal non-conforming use gives property owners the right to continue to use their property in the same manner they were before the law passed. For example, a “grandfathered quarry” might be exempt from new, more restrictive pollution laws or an operation prohibition. This concept is commonly called “grandfathered in.”

Can Municipalities End Your Rights Through Regulation?

What happens when a municipality then revises its zoning ordinances only allowing the use if you pay an annual permit fee or jump through other various hurdles?
Wisconsin law states that a municipality may not require a property owner to obtain a permit where the property owner previously established a pre-existing non-conforming use:
  • In re Brandt, 15 Wis. 2d 6, 12, 112 N.W.2d 157, 159 (1961) “Brandt was exercising a nonconforming use to mine gravel commercially and had not discontinued the use thereafter, the questions relating to a permit are moot, because he can continue his operations without any permit.”
  • Kraemer Co., LLC v. Pierce Cty. Bd. of Adjustment, 2006 WI App 56, 290 Wis. 2d 510, 712 N.W.2d 86 (unpublished) (“contrary to the board’s assertions, the 1998 zoning code revisions cannot extinguish or restrict this legal nonconforming use, nor require Kraemer to obtain a permit in order to continue with this legal nonconforming use.”)
  • Des Jardin v. Greenfield, 262 Wis. 43, 47-48, 53 N.W.2d 784, 786 (1952) Generally speaking, a nonconforming use existing at the time a zoning ordinance goes into effect cannot be prohibited or restricted by statute or ordinance, where it is a lawful business or use of property and is not a public nuisance or harmful in any way to the public health, safety, morals, or welfare. In other words, a zoning ordinance is invalid and unreasonable where it attempts to exclude and prohibit existing and established uses or businesses that are not nuisances. If a zoning ordinance is adopted and premises are used for a nonconforming use, the owner is within their rights in continuing that use. Zoning regulations cannot be retroactive, prior nonconforming uses cannot be removed by zoning regulation, and existing conditions cannot be affected by a new or changed zoning regulation

Wisconsin law prevents municipalities from adopting new regulations to end pre-existing uses. Municipalities may attempt to constrain property owners with expensive permit requirement or use other regulatory means to effectively end pre-existing nonconforming uses. Fortunately, Wisconsin recognizes that individuals’ constitutional property rights cannot be easily circumvented.

Conclusion

Wisconsin law prevents municipalities from ending your grandfather rights by requiring you to obtain permits, pay fees, or to jump through other unreasonable hoops.

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