An appeals court ruling this week allows 17 Key West property owners to rent their homes on a short-term basis for half the year.

The 3rd District Court of Appeal ruled that the 17 plaintiffs were grandfathered in because their properties had been used for transient rentals before 1998, when the city began regulating the practice.

The Wednesday decision by a panel of three judges was based largely on a well-known transient rental case in Key West, the Rollison case. In that proceeding, property owner Kathy Rollison, who owns a property in Truman Annex, sued the city for the right to short-term rentals, claiming she had been doing so before the city changed its laws.

"She challenged the city's right to tell her she could no longer rent her property for fewer than 30 days," said attorney Jeff Bell, who represented the 17 successful plaintiffs in the recent appeal.

Rollison lost at trial, but appealed and won, prompting 425 Truman Annex property owners who previously had rented their homes in the short-term to seek the same rights. The city granted those rights to the Truman Annex owners, but denied the requests of Bell's 17 clients.

"The city claimed that the Rollison decision only pertained to Truman Annex," Bell said Thursday. "But there was never a distinction drawn between Truman Annex and non-Truman Annex."

So Bell filed suit against the city in 2005 on behalf of those 17 property owners. Sixteen are in Old Town and one is in Midtown, Bell said.

The case went to trial in 2009, and in March 2010, Circuit Judge Mark Jones ruled that Rollison applied only to Truman Annex, "so we appealed and won," Bell said.

Bell emphasized the appeals ruling will not "open the floodgates" for more transient rentals all over town.

"This decision is limited to these 17 properties," he said. "In my opinion, if someone wanted to use the same legal arguments that we used, I believe the statute of limitations expired in 2007."

The 17 property owners, as well as the 425 Truman Annex owners, may rent their properties for less than half the year if they have a non-transient occupational license that simply allows them to do business in Key West, Bell said.

Such were two of the three criteria that qualified Rollison, the others in Truman Annex, and now these 17 other properties to conduct short-term rentals. The third requirement is proof that the property was used for transient rentals before 1998.

Bell said his clients were pleased with the outcome, as they have been prohibited from renting their properties transiently during the course of the legal wrangling.

The city has 15 days to ask for a rehearing, Bell said. Attorney Michael Burke, who represented the city at the appeals level, did not return a phone message The Citizen left at his office Friday, which was a holiday.

mmiles@keysnews.com