The Law Office of J. Patrick Sutton
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I handle civil appeals and real estate disputes. Because I run a lean, paperless practice, I offer an affordable alternative to large law firms. I go toe-to-toe with big firms representing cities, corporations, and HOA's in almost every case I handle.

I brief and argue civil appeals in the Texas Supreme Court, Texas intermediate appellate courts, the 5th Circuit U.S. Court of Appeals, and the U.S. Supreme Court. I write friend-of-the-court (“amicus”) briefs for interested persons, organizations, and entities.

My real estate trial work includes
HOA law, fraud, construction disputes, and mortgage/foreclosure disputes. I never represent HOA's or banks, and I don't sue consumers.

My trial and appellate work has included numerous class actions and statewide
multi-district litigation (MDL) proceedings against major banks and corporations. More recently, I've been at the forefront of statute of limitations challenges to foreclosures where lenders delayed foreclosing for many years. I've got such cases pending in state and federal courts around the state.

BREAKING NEWS: CITY OF GRAPEVINE SHORT-TERM RENTAL AND HOME-SWAP BAN HIT WITH INJUNCTION


In a stunning rebuke to municipal overreach and unfairness, my clients — a group of homeowners in the City of Grapevine — prevailed today (November 7, 2018) in obtaining a temporary injunction halting enforcement of a new City of Grapevine ban on short-term rentals. The order is
HERE. My clients brought a lawsuit claiming that the new Grapevine STR ban is unconstitutional in various ways — as a regulatory "taking," as violative of due process, and as preempted by other Texas law. The City defended the new ban in various ways, among them an argument that the Grapevine ordinances already barred STR's by their silence! That is, the familiar argument of STR opponents that if a law or ordinance is silent about STR's but require "residential use," then STR's are by implication forbidden. The Texas Supreme Court rejected that in my Tarr case on May 25, 2018, but the City of Grapevine appears to have missed that point.


TEXAS SUPREME COURT, IN BROAD PROPERTY RIGHTS DECISION, ALLOWS SHORT-TERM RENTALS AS A "RESIDENTIAL USE"


My client, Ken Tarr, has now prevailed in a case that protects Texas property owners statewide. On May 25, 2018, the Texas Supreme Court, in a unanimous decision authored by Justice Brown, held that short-term rentals are not barred by the widespread, typical "residential use only" deed restriction. Even more importantly, the case announces a rule that restrictions cannot be interpreted into existence where silence reigns. Wow! We can now say with some confidence that what is not expressly forbidden by deed restrictions is allowed. Seems like a no-brainer, but it's been a long time coming — I've been litigating short-term rental cases for 9 years, pushing them forward across the state in hopes of getting one up to the Supreme Court.

"Residential use only" is the commonest deed restriction and zoning ordinance and goes back over 100 years. Opponents of short-term rentals insist that short-duration leases constitute the operation of a business at a home, a logically untenable position for any number of reasons — not the least of which is that the tenants are not doing anything different on day 31 than they were doing on day 29. The Texas Supreme Court, joining at least 19 other states, rejected the business-use argument in a lengthy, carefully-reasoned, and logically unassailable opinion. The new decision is sufficiently exhaustive that it seems destined to become the leading state supreme court opinion in this area of the law.


TEXAS SUPREME COURT READY TO TAKE UP ANOTHER SHORT-TERM RENTAL CASE


The Texas Supreme Court, the
Tarr case just mentioned, allowed STR's as a "residential use." However, one of my clients had another case pending right behind Tarr, and that's the Ridgepoint Rentals, LLC v. McGrath case. The Tarr opinion obliquely referenced the Ridgepoint Rentals case when the Court said it was NOT deciding whether a shopping-list of defined commercials uses, such as "hospitals, duplexes, and hotels," would bar STR's. Well, that's the Ridgepoint Rentals case. The Ridgepoint Rentals case is now being briefed on the merits. Assuming the Court does grant review, which seems promising, expect a decision at the very end of 2018.


CITY ORDINANCES

One STR issue that is heating up is whether city ordinances that ban short-term rentals are vulnerable to legal challenge. I believe they are, and on several constitutional grounds. A Texas appeals court in Houston recently allowed such a challenge to proceed based on the theory that imposing such an ordinance on a homeowner who purchased based on STR rights had it taken away — an unfair “taking” of property. See Village of Tiki Island v. Ronquille, 463 S.W.3d 562, 565 (Tex. App. - Houston [1st Dist.] 2015).

The Austin STR ordinance seems to me to be unconstitutional on several grounds. I represent one client in a
challenge to the ordinance based on its vagueness in not making clear whether leases of 30 days or more are exempt. The City of Austin is requiring an STR permit even for long-term leases if tenants do not physically occupy a property for the entire term of their lease, in effect making it impossible for any landlord to avoid the STR ordinance. If the City knocks on the door and the tenant says she is only staying for three days, the City issues a citation for renting without an STR license even if the lease is for 30 days or more! Obviously, when someone leases a property, they need not actually stay there if they don't wish to. Any owner who wishes to avoid the STR ordinance necessarily leases for 30 days or more, but that's no safe harbor in Austin.

The Law Office of J. Patrick Sutton