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July 19 2017

In the Poconos, Another Small Business Falls Victim to Unnecessary Licensing

by Charlotte Hays

Sally Ladd, 61, managed property for clients in Pennsylvania's Pocono Mountains.

Apparently, she did a great job.  Samantha Harris, a vice president at the Foundation for Individual Rights in Education (FIRE), explains in Reason magazine, how Ms. Ladd's skills enabled them to rent out their vacation house, which was otherwise in danger of being sold.

Almost immediately, things turned around for us financially. Sally's background in digital marketing made her very skilled at advertising our property, and we started to get more rentals than we had before. Sally also had a great sense of what types of little improvements—some decorative touches here, a fresh coat of paint there—would make our property more attractive to renters. The place was finally paying for itself, and we couldn't have been happier.

The arrangement was beneficial to Ms. Harris' family and to Ms. Ladd. What's not to like? It was a win-win, right?  But no. Early this year, Harris and her husband received a form letter from Ms. Ladd that contained this gem:

In early January I was contacted by the State of Pennsylvania and informed that a complaint had been filed against my company for managing properties without a real estate license....I need to begin the process of deactivating your property listings on my accounts, dissolving my company and completing all rentals in progress.

How much trouble would it be to get a license:

It turns out that in Pennsylvania, anyone who wants to act as a property manager—even just for short-term vacation rentals—has to be a real estate broker licensed by the state. To get this license, Ladd would have to take 300 hours of approved instruction, pass two exams, and spend three years working as an apprentice under an already-licensed broker. Faced with these burdensome requirements, Ladd—who is 61 years old—felt she had no choice but to shut down her small business.

So the state shut down a business that was providing income to Ms. Ladd and valuable services to her clients. What are the odds the complaint was lodged by somebody who used regulatios to get Mrs. Ladd's business?

Licensing for some professions is essential: I don't want to have brain surgery by a doc without a medical license. But managing vacation rental property, and doing by all accounts an excellent job? Licensing regulations are often the result of lobbying by an industry to get rules that keep out the competition. Such regulations punish ingenuity and hold back people with talent and gumption.

 But it's not the end of the story--we hope.

Harris had worked as an intern at the Institute for Justice, which takes on cases involving economic liberty. The institute, Ladd, and the family are suing the Pennsylvania Real Estate Commission and the Pennsylvania Department of State.

Let't hope this attracts attention--licensing often kills jobs and prevents people from buying services they want.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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