Modern Builders, LLC; Alicia Gonzalez; Betsy Darling; Callie Stevens; Grayson Buster; Jaime Cobb Tinsley; Tom Tinsley; Jesse Fox; Kelray LLC; Urban Legacy Properties, LLC, d/b/a Urban Legacy Properties Series A LLC; Lauren A. Brady; Lauren Barrett; Lesa Susi, Trustee of the Susi Living Trust; Lori Dugdale; M and M Pool House LLC; Martha Dominguez; Adulfo Dominguez; Sean Sullivan; Shannon Ross; Susan Harper; Smith-Wallace Properties, LLC; Theresa Riley, Trustee of the TK Riley Family Trust; Tom Krause; Tracey Amaya; Eduardo Amaya; Brookvale Holdings, LLC; and Lucas Ruiz v. City of Fort Worth

Summary

The Texas Court of Appeals for the Second District considers challenges by property owners to the City of Fort Worth’s ordinances regulating short-term rentals. The court holds that the owners have no vested right to use their properties as short-term rentals, that the ordinances rationally relate to legitimate governmental interests, and that the ultra vires claim is improper against the City. The court also rejects challenges to the admission of expert testimony and the award of attorney’s fees to the City.

Holdings

1. The owners did not have a vested common-law right to use their properties as short-term rentals. A general right to lease property does not categorically include a vested right to lease for short-term periods.
2. The short-term-rental ordinances rationally related to legitimate governmental interests, including preserving the character of single-family residential neighborhoods, safeguarding residents and the public, and minimizing adverse effects associated with transient rental uses.
3. The 2018 ordinance did not unconstitutionally impair settled expectations because the owners lacked a reasonable and settled expectation that they could operate short-term rentals in Fort Worth's residential districts.
4. The owners did not have a viable equal-protection claim because the challenged classification was not based on a suspect classification or fundamental right and the ordinances rationally related to legitimate governmental purposes.
5. The ultra vires claim was not properly brought against the City. Because the owners alleged that the municipality itself exceeded its authority rather than naming an appropriate government official in an official capacity, the claim was incurably deficient and the trial court lacked jurisdiction.
6. Any error in admitting the City's expert affidavit was harmless because the owners did not show that the affidavit probably caused the rendition of an improper judgment, and they characterized the testimony as cumulative.
7. The trial court did not abuse its discretion by awarding attorney's fees to the City under the Texas Uniform Declaratory Judgments Act.

Questions Presented

1. Whether the owners had a vested property right under the Texas Constitution to lease their properties for periods of fewer than thirty days.
2. Whether Fort Worth's short-term-rental ordinances rationally related to legitimate governmental interests and therefore satisfied due-course-of-law and equal-protection requirements.
3. Whether the 2018 ordinance was an unconstitutional retroactive law because it impaired the settled and reasonable expectations of owners who had operated short-term rentals before its enactment.
4. Whether the owners stated a justiciable ultra vires claim against the City for allegedly exceeding its authority under the Texas Zoning Enabling Act.
5. Whether the trial court reversibly erred by admitting the City's expert affidavit in connection with summary judgment.
6. Whether the trial court abused its discretion by awarding attorney's fees to the City under the Texas Uniform Declaratory Judgments Act.

Disposition

other