On April 2, 2020, Governor Lamont issued Executive Order 7T which, among other things, prohibits the provision of short-term lodging for leisure, vacation, and other purposes in Connecticut, except in the limited circumstances set forth below. The term "lodging" as used in the order includes bed and breakfasts, hotels, motels, boarding houses, professionally managed units providing rentals of 31 days or fewer, short-term rentals (including Airbnb & VRBO), resorts, inns, and timeshares.
The order permits the provision of lodging for only the following uses:
- For health care workers, first responders, and others who work for an essential business;
- For out-of-state workers engaged in transporting materials, logistics, and construction associated with certain health-related services;
- For "members of vulnerable populations," including people experiencing homelessness, victims of domestic violence, and people returning from incarceration;
- For self-isolating Connecticut residents or the families or roommates of self-isolating residents under a quarantine order, but only for the duration required;
- For those receiving long-term, specialized medical care from a Connecticut physician and the family members of such individuals;
- For those affected by "extenuating circumstances," like fire or casualty, or those "unable to return to their own homes due to flight cancellations, border closures, or other direct and material constraints on travel"; and
- For those workers providing the aforementioned lodging services.
Businesses may, however, provide "lodging-related services through remote means that do not require" anyone "to enter or appear at any brick-and-mortar lodging premises"; however, that probably just permits businesses to carry out administrative functions during the COVID-19 crisis.
Anyone occupying lodging as of April 2, 2020 may remain in their current lodgings through the end of their originally scheduled stay, but the order prohibits extending existing lodging arrangements and cancels future reservations for the duration of the emergency, except to provide the essential services listed above. The order further mandates that lodging operators make "reasonable efforts" to refund deposits to people who cannot engage in lodging as a result of the order.
A number of questions surrounding the order will need to be addressed as implementation continues. As an initial matter, the types of businesses qualifying as "essential" is fairly broad, which means that the exceptions to the order might be broader than first realized. At the same time, lodging providers must ensure that the purpose of the lodging is not for leisure or vacation. In other words, it is not enough to verify that the renter provides essential services, proprietors must also verify that the reason for the lodging is one of the permissible uses.
In addition, the scope of those who are "members of vulnerable populations" is unclear. The order's examples (the homeless, victims of domestic violence, and outgoing inmates) suggest that it refers to those who are generally vulnerable, not just those vulnerable to COVID-19. Also, it is unclear as to what falls within the scope of the "extenuating circumstances" for which lodging may be provided. "Fire" and "casualty" offer some guidance, and suggest that these terms should be interpreted in a manner similar to casualty clauses in lease agreements.
To reiterate, "lodging" includes "professionally managed units providing rentals of 31 days or fewer." So, landlords should be wary of month-to-month leases, which may fall under the scope of the order. Under the order, it may be the case that a 30-day initial rental term cannot be renewed. How the order will be enforced is an open question. State statutes permit local police to charge a violator with up to a Class D felony, which the state police can do, as well.
Finally, it is important to note that the order effectively nullifies a host of private contracts and then orders lodging providers to refund prospective lodgers. Such a result may raise constitutional concerns under the Contracts Clause of the United States Constitution.
Ultimately, the order is expansive and dramatically affects lodging businesses; however, due to the order's substantial impact on the rental market, those who contract with lodging businesses should also pay close attention to those contractual relationships moving forward. Shipman & Goodwin attorneys are available to assist property owners and business owners in all aspects of the hotel and hospitality sector with functional and pragmatic solutions during these uncertain times. We will endeavor to analyze and explain the relevant law in these areas and related considerations, and update our Coronavirus Resource Center (specifically, the Real Estate Leasing page) periodically to include relevant Connecticut, New York, federal and local laws, rules and regulations that are enacted during this crisis, as well as court filings and relevant precedent or other topical information, which are being circulated on these matters.