Town and Huff et al enter into ‘Stay’

By Kim Lewicki, Highlands Newspaper

Following the Special Called Closed Session meeting last Thursday afternoon, Mayor Pat Taylor announced that the Highlands Town Board of Commissioners authorized its attorney Robert E. Hagemann to proceed with entering into a Stay Order for six months concerning the Huff et al v. Town of Highlands lawsuit. 

“Doing so will avoid unnecessary court costs while we wait to see if the NC General Assembly adopts legislation pertaining to short-term rentals,” said Taylor.

The decision to enter into a Stay comes on the heels of the Jan. 19 announcement at the Town Board meeting that the town would be filing a motion to dismiss the Huff vs. Town of Highlands case in court in Swain County February 27.

However, with the joint consent of the parties – Plaintiff Huff et all and Defendants Town of Highlands – a stay of these proceedings was outlined and ordered:

1. Plaintiffs filed the Complaint in this matter on October 13, 2021, contesting, among other things, Defendant’s legal authority to regulate short-term rentals.
2. Defendant filed a motion to dismiss the complaint in December 2021, and has not filed an answer.
3. Plaintiffs moved for partial summary judgment and filed a motion to attorneys’ fees that they noticed for hearing on February 27, 2023. 
4. The scope of a municipality’s authority to regulate short-term rentals has been the subject of litigation nationwide and in this state. See, e.g., (Schoeder cite; Blowing Rock cite; other cites).
5. The Parties believe and understand that the NC General Assembly this year intends to consider legislation that directly addresses a municipality’s authority to regulate short-term rentals.  
6. Any such legislation would have a direct impact on the legal claims in this case and any potential ruling on the legal claims from this Court. 
7. The Parties believe it would be in the interest of judicial economy and the Parties’ resources, which include taxpayer funds, to stay this case pending action by the General Assembly on the issue of short-term rental regulation. 

The Agreement statement says:

1. The Parties agree that a stay of six months from February 27, 2023, is a reasonable length of time for this action to be stayed.
2. The Parties have agreed that this stay may be lifted upon agreement of the Parties or further order of this Court.  
3. The Town shall not pass any material legislation regarding or relating to short-term rentals during the period of the stay. Passing such material legislation shall be grounds for dissolution of the Stay Order.
4. Any dispute as to whether legislation is “material” for purposes of this Agreement shall be decided by the Court upon a motion by Plaintiffs to dissolve the Stay Order. 
5. This Agreement shall not be construed to prejudice the legal rights of the Parties or pending claims in the Litigation. 
6. The Agreement was entered for the purposes of preserving the resources of the Parties and shall not be deemed an admission or concession by either Party to any fact or legal issue.

As to the future of short-term rentals in North Carolina, Jennifer Sokolowsky with Avalara My Lodge Tax reported moving forward in 2023, extreme positions on STR regulation — from total STR bans on the government side to a complete lack of rules on the operators’ side — will not be the norm. 

“Instead, many communities will find that a more balanced approach will likely achieve the most success. In this best-case scenario, communities will be able to take advantage of the many benefits STRs bring, while having mechanisms in place to effectively curb any negative effects and giving all sides an opportunity to contribute.”