Miami Beach Ban on Short-Term Rentals Struck Down by Court

Short Term Rentals

Susan Askew
Susan Askew

Miami Beach Ban on Short-Term Rentals Struck Down by Court:

Ruling says city ordinances conflict with state law

UPDATED: October 7, 11:45 pm

A Miami-Dade County Court has struck down Miami Beach’s ban on short-term rentals. In a ruling today, 11th Circuit Court Judge Michael Hanzman wrote the City’s ordinances “are in jarring conflict with [State law] and are therefore illegal and unenforceable.”
Natalie Nichols, who owns two properties that she previously rented out on a short-term basis, sued to have the ban overturned on the basis that short-term rentals are legal in some areas of the City (though in a small number of places), treating her properties differently from “similarly situated properties.” Nichols owns a single-family home on Sillwater Drive that she purchased in 2004 and a four-plex on 86th Street that she acquired in 2006.

The suit also challenged the “grossly excessive punishment meant to deter people from peacefully using their property for home-sharing.” While the State allows fines for code violations of $1,000 per day for the first infraction and $5,000 per day for repeat violations, Miami Beach’s fines for short-term rentals start at $20,000 for a first violation, then increase to $40,000 for the second, $60,000 for the third, $80,000 for the fourth, and $100,000 for each violation thereafter. 
The Goldwater Institute filed the lawsuit on behalf of Natalie Nichols in June of 2018. Short-term rentals are described as less than six months and a day.
In his ruling, Hanzman noted the “hefty (some might say exorbitant) fines” and stated, “The City’s claim that its Ordinances do not actually conflict with [State statutes] strains credulity. Does Chapter 162 authorize the City to impose fines greater than those authorized [by State law]? The short answer is no.” Citing previous case law, he wrote it has been established that “[m]unicipal ordinances are inferior to laws of the state” and that a municipality “may not legislate ‘in conflict with state law.’”

The Court did not rule the policy illegal. "The City – exercising its police power – decided to ban virtually all short-term rentals on Miami Beach. That is a policy decision the Court may not second guess or interfere with." However, Hanzman noted, the State "in the exercise of its policy power – clearly and unambiguously imposed caps on the amount local governments may fine citizens for code violations" and that is the reason for his ruling. In a footnote, he wrote, "The Court declines the City's invitation to sever the penalty provisions from the remainder of these ordinances, and notes that the City is free to enact replacements so long as they are constitutional and do not conflict with state statutory law." The State pre-empted cities from regulating short-term rentals in 2011 but grandfathered in those municipalities that already had regulations in place. Miami Beach's regulations went into effect in 2010 but the judge's ruling invalidates the ordinances.

In response to a request for comment, Matthew Miller, Senior Attorney for the Goldwater Institute, said, “We are extremely pleased that Judge Hanzman recognized that Miami Beach violated Florida state statutes with its short-term rental restrictions. This thorough ruling vindicated the property rights of every homeowner in the City.”
Mayor Dan Gelber provided this comment via text message: “We respectfully disagree with this Court’s ruling and intend to ask the appellate court to validate our City’s ordinance.”
The City has waged war against illegal short-term rentals which some have complained disrupt the peace in their neighborhoods and condo buildings. In August, the City reached a settlement with Airbnb over its listings and a City ordinance that put the responsibility on rental platforms to verify that operators had the appropriate City licenses and provided accurate information on the rental sites. The settlement requires that hosting platforms post a notice on their websites advising that a City-issued business tax receipt (BTR or license) and a resort tax certification are required to list a rental property on the hosting platform but “The hosting platform is not required to verify whether those numbers are issued by the City or are otherwise valid,” according to the settlement. Airbnb was also required to pay the City $380,000 as part of the agreement.

Meanwhile, hosts who post fake business tax receipt numbers could face jail time under another ordinance that passed recently. 


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