Rental Licensing: Federally Unconstitutional?

Rental Income Investment Property by Boulder Financial Realty

The evolving landscape of rental property regulations has seen recent judicial scrutiny over warrantless inspections. This article delves into two crucial cases that have far-reaching implications on rental property inspections and their constitutionality. The first case pertains to Portsmouth, Ohio, where the Southern District of Ohio ruled rental inspections without a warrant unconstitutional. The second case concerns Austin, Texas, where a federal judge declared the city’s short-term rental ordinance unconstitutional due to its restrictive clauses. Both cases touch upon the delicate balance between regulatory measures and property rights, illustrating the ongoing debate surrounding rental inspections in the United States.

Portsmouth, Ohio – Challenging Warrantless Inspections

In Portsmouth, Ohio, property owners raised concerns about the rental dwelling code’s violation of their Fourth Amendment rights, specifically their protection against unreasonable searches. The rental dwelling code in question allowed administrative inspections without a warrant, prompting property owners to challenge its constitutionality. U.S. District Judge Susan Dlott presided over the case and concluded that the Portsmouth rental dwelling code violated the Fourth Amendment, affirming that warrantless administrative inspections were unconstitutional.

Key Arguments and Ruling

Judge Dlott’s ruling highlighted the absence of a warrant procedure or precompliance review mechanism in the Portsmouth rental dwelling code. This lack of oversight led to property owners and tenants facing a dilemma: either consenting to warrantless inspections or risking criminal charges. The ruling emphasized that the Fourth Amendment safeguards individuals from such predicaments. The case underscored the importance of warrant procedures and precompliance reviews to protect property owners from unreasonable searches, upholding the tenants’ and property owners’ Fourth Amendment rights.

Implications of the Portsmouth Ruling

The Portsmouth ruling establishes a precedent for challenging warrantless administrative inspections, setting the stage for potential reforms in rental property regulations across the United States. It emphasizes the need for legislative frameworks that ensure proper oversight, respecting property rights while achieving regulatory objectives.

Airbnb Rules also deemed illegal when restricting an owners right to earn income with their property.

Austin, Texas – Unconstitutional Restrictions on Short-Term Rentals

The second case unfolds in Austin, Texas, where a federal judge declared the city’s short-term rental ordinance unconstitutional due to restrictive provisions. The ordinance, enacted in 2016, prohibited property owners from operating short-term rentals unless they lived on the property. This requirement hindered the ability of property owners to rent out their properties, prompting a lawsuit by a Houston couple who were denied a license for a short-term rental.

Key Arguments and Ruling

The plaintiffs argued that the ordinance violated the dormant Commerce Clause, preventing the city from restricting the ability of property owners to generate income from their property. The judge ruled in favor of the plaintiffs, emphasizing that the ordinance was unconstitutionally retroactive under Texas law. The ruling reinforced property owners’ rights to utilize their property for rental purposes, even if they were not residing on the premises.

Implications of the Austin Ruling

The Austin ruling challenges restrictions on short-term rentals, potentially influencing similar ordinances in other cities. It reiterates the importance of upholding property rights and emphasizes the need for regulations that balance community interests with property owners’ rights to use and derive income from their property.

Comparative Analysis and Broader Implications

Both the Portsmouth and Austin cases shed light on the delicate balance between regulatory measures and property rights. The rulings underline the significance of Fourth Amendment protections and the right to use property for rental purposes, showcasing the necessity for well-defined and constitutionally sound regulatory frameworks.

In light of these rulings, rental property regulations across the United States may undergo scrutiny to ensure they align with constitutional standards. Rental property owners, advocates, and legal experts may engage in ongoing dialogues and legal challenges to promote a regulatory environment that respects individual rights and promotes community welfare simultaneously.


The legal landscape surrounding rental property regulations continues to evolve, with recent cases challenging warrantless inspections and restrictive short-term rental ordinances. The rulings in Portsmouth, Ohio, and Austin, Texas, highlight the need for a careful balance between regulatory objectives and property rights. As these cases set important precedents, it is essential to monitor future developments in rental property regulations, ensuring they uphold constitutional protections while achieving community interests.

This article does not constitute legal advice. For specific legal inquiries or concerns, it is recommended to consult with a legal professional.

Sources: The Portsmouth Daily Times, The 1851 Center for Constitutional Law, KUT 90.5 and .

We reached out to the rental license department supervisors in Boulder for comment and have not received a response.

For any inquiries or further information, please contact us at [email protected].