WILL lawsuit results in City Council action
The News: After a lawsuit from the Wisconsin Institute for Law & Liberty (WILL), the Lake Geneva City Council took action this month to amend their city ordinance for home rentals, removing harmful provisions that violate the rights of homeowners.
Background: WILL and the Wisconsin Realtors Association (WRA), on behalf of three homeowners, issued a demand letter to the City of Lake Geneva last fall identifying harmful and illegal provisions in the City’s short-term-rental ordinance. State law gives homeowners the right to rent their home on a short-term basis for up to 180 days in a year. To secure a home rental license from the City of Lake Geneva, however, homeowners had to install a ‘Knox Box’ giving city officials the key to their home, open their homes to warrantless inspections from city officials, provide their guest registries and rental records on demand, and pay an exorbitant $2,000 fee, far and away the largest such fee in the state.
WILL followed up with a complaint filed in Walworth County on December 10, 2019, alleging Fourth Amendment violations related to the inspection and Knox Box provisions, and was preparing to file a separate action before the Tax Appeals Commission to challenge the $2,000 fee.
Property Rights Victory: With litigation pending, the Lake Geneva City Council took action to address key provisions in WILL’s demand letter and lawsuit. On June 8, 2020, the Lake Geneva City Council modified its short-term-rental ordinance as follows:
- Made installation of a “Knox Box” and providing house keys to city officials optional
- Added a warrant requirement to the home inspection provision and clarified that homeowners may not be penalized for declining to consent to a warrantless inspection
- Required city officials to provide a written explanation for any request to inspect records and to give homeowners sufficient time to review and respond to the request
- Lowered the fee from $2,000 to $750
These modifications by the City Council largely resolve the Fourth Amendment lawsuit WILL filed on December 10. WILL attorneys are evaluating whether to challenge the new fee of $750, which is still one of the highest in the state.
The Quotes: WILL Senior Counsel Don Daugherty said, “We are pleased the Lake Geneva City Council took these steps to secure the property rights of homeowners who choose to occasionally rent their home on a short-term basis. We stand ready to protect the rights of homeowners throughout the state.”
WRA Senior Vice President of Legal and Public Affairs Tom Larson said, “Both the U.S. Constitution and Wisconsin Statutes protect the rights of homeowners to rent their homes on a short-term basis, subject to reasonable local regulations. We applaud the changes made to the City of Lake Geneva’s short-term rental regulations, which will help better protect the property rights of homeowners in the City.”
- WILL’s Demand Letter, October 2019
- WILL’s Complaint, December 2019
- “City faces lawsuit over rental vacation home regulations,” Lake Geneva Regional News, May 27, 2020