S. Ladd v. Real Estate Commission of the Com. of PA, & DOS (BPOA) of the Com. of PA
321 M.D. 2017
| Pa. Commw. Ct. | Dec 22, 2021Background
- Petitioners (Sara Ladd, Samantha Harris, and Pocono Mountain Vacation Properties, LLC) challenged application of the Real Estate Licensing and Registration Act (RELRA) broker-licensing requirements to Ladd’s short-term vacation property management business, seeking declaratory and injunctive relief (filed 2017).
- Ladd operates PMVP from New Jersey and describes her services as marketing/booking short-term (under 30 days) rentals online, handling payments, coordinating cleanings, and acting as an independent contractor for property owners.
- RELRA requires broker licensure (salesperson then broker): extensive coursework (315 hours total), a 3-year apprenticeship, examinations, and a Pennsylvania brick-and-mortar office; several narrow exemptions exist (e.g., hotel managers, certain residential managers).
- The Pennsylvania Supreme Court in Ladd v. Real Estate Commission (Ladd II) applied the Gambone heightened rational-basis test and held the petition stated a colorable as-applied claim that RELRA’s requirements may be unreasonable or not substantially related to protecting the public when applied to Ladd’s asserted short-term rental services; the case was remanded for further proceedings.
- On remand the parties filed cross-applications for summary relief; the Commonwealth Court denied both applications and dismissed an application to strike as moot because genuine disputes of material fact remain—primarily about the actual scope and nature of Ladd’s business and contracts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether applying RELRA broker requirements to Ladd violates substantive due process under the PA Constitution (Gambone test) | RELRA’s apprenticeship, coursework, and office requirements are unrelated, unduly oppressive, and patently beyond necessities for short-term online vacation property management | RELRA is reasonably related to consumer protection; Ladd’s actual business involved complex contracts, leasing activity, handling of client funds, and therefore fits RELRA’s reach | Court declined to decide on the merits on summary relief because factual disputes about the nature/scope of Ladd’s business preclude judgment for either side |
| Whether undisputed record facts support summary relief for Petitioners (i.e., Ladd only manages short-term online rentals) | Ladd only intends to manage short-term rentals online; this fact is undisputed and supports as-applied invalidation | Respondents say record shows Ladd engaged in broader, more traditional broker-like activity | Denied—Petitioners failed to show absence of genuine material fact; court will not accept allegations as true at this stage |
| Whether undisputed record facts support summary relief for Respondents (i.e., RELRA applies) | N/A (Petitioners contest) | Respondents point to contracts, control over properties, longer-term agreements, handling of funds, and client disputes as undisputed facts justifying RELRA application | Denied—court found parties’ competing factual narratives create genuine issues of material fact |
| Motion to strike Respondents’ document as hearsay | Document is inadmissible hearsay and should be struck | Respondents relied on the document in their summary relief filing | Dismissed as moot given denial of summary relief; parties may litigate admissibility later |
Key Cases Cited
- Ladd v. Real Estate Commission, 230 A.3d 1096 (Pa. 2020) (Supreme Court applied Gambone means-end test and found a colorable as-applied challenge to RELRA)
- Ladd v. Real Estate Commission, 187 A.3d 1070 (Pa. Cmwlth. 2018) (initial Commonwealth Court decision sustaining demurrer reversed on appeal)
- Gambone v. Commonwealth, 101 A.2d 634 (Pa. 1954) (articulates heightened rational-basis test for police-power regulations)
- Nixon v. Commonwealth, 839 A.2d 277 (Pa. 2003) (describes means-end substantive due process review under Pennsylvania Constitution)
- Shoul v. Dep’t of Transp., Bureau of Driver Licensing, 173 A.3d 669 (Pa. 2017) (recognizes Gambone as Pennsylvania’s more restrictive rational-basis standard)