Bundle of Sticks: You Can Own Your Property But Can’t Rent It

January 3rd, 2014

In property, we use the image of the bundle of sticks to explain to students that ownership of something is multi-faceted. The most essential stick is the right to exclude. But a really important (and often understated) stick  is the right to include. Deciding who you can let onto your land, and in what terms, is essential. Usually, a person who owns land in fee simple, can sell it to anyone he chooses, and relatedly can give less than a fee simple to someone else. For example, a leasehold.

But Winona, Minnesota passed an odd law that only allows rental properties to make up 30% of the homes on a given block. If homes on the block are rented before you, then you can’t rent your own land!

Minnesota Public Radio has the story:

The Minnesota Court of Appeals hears arguments today in a case involving the rights of Winona homeowners to rent out their properties.

The city’s rental law allows rental properties to make up only 30 percent of homes on any given block.

It’s a law that Ted and Lauren Dzierzbicki weren’t aware of when they bought a house in Winona in 2007. They planned to have their daughter Jenna live in part of the house while she was a student at Winona State University and rent the rest out to other students. They spent $40,000 to renovate the two-story house.

But when the Dzierzbickis applied for a rental license, the city said the house was ineligible for a permit. The block had already reached its 30 percent limit for rental certificates.

The Dzierzbickis and two other homeowners filed suit against the city in Winona County District Court.

Earlier this year, a district court judge said that law is constitutional. Now, the group of Winona homeowners is appealing that decision, arguing it’s not the city’s job to limit the number of homeowners who want to rent their properties.

Of course, the landmark zoning case, Village of Belle Terre v. Borrass began in a village that tried to ban college students from nearby Stony Brook University from living together. The plaintiffs are being represented by the Institute for Justice.

“Whether or not you’re able to rent out your property to somebody else should not depend on whether or not your neighbor has already rented their property out,” said Anthony Sanders, an attorney with the Institute for Justicerepresenting the Winona homeowners. “We think that we have a very good shot at overturning the district court’s decision to ignore the right of homeowners to rent out their homes and to protect property rights in Minnesota.”