Ordinance Proposed to Reduce Short-Term Rental Fines in Miami Beach

Short Term Rentals

Susan Askew
Susan Askew

Ordinance Proposed to Reduce Short-Term Rental Fines in Miami Beach:

Courts have ruled the fines illegal; legality of ban still unclear

An ordinance to bring Miami Beach’s fines for illegal short-term rentals into line with Florida Statute goes to Commissioners this week as the City attempts to maintain its ban on the rentals in most places. The proposed legislation follows an appeals court ruling that the fines – ranging from $20,000 for the first violation up to $100,000 for a fifth within 18 months – are “illegal and unenforceable.”

Short-term rentals, defined by the City as less than six months and one day, are prohibited in single family homes and other multifamily residential buildings located in certain areas of the City. The Goldwater Institute filed suit on behalf of Natalie Nichols in June 2018 to overturn the City’s ban. Nichols, who owns two properties that she previously rented out on a short-term basis, claimed her properties were treated differently from “similarly situated properties” where short-term rentals are allowed. 

In October 2019, 11th Circuit Court Judge Michael Hanzman ruled in Nichols’ favor writing the City’s “hefty (some might say exorbitant) fines,” are in conflict with State law which caps fines for code violations at $1,000 per day for the first infraction and $5,000 per day for repeat violations. The Third District Court of Appeals agreed.

The bigger issue at hand is what this means for the future of short-term rentals in Miami Beach.  Nichols’ attorney says it means they are legal citywide. The City disagrees.

At issue is a footnote in Hanzman’s October 2019 ruling in which he declined to sever the penalty provisions from the ordinance which had the effect of striking down the ban on short-term rentals. 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 invalidated the ordinances. 

Hanzman indicated “[T]he City is free to enact replacements so long as they are constitutional and do not conflict with state statutory law.” And therein lies the rub. The City cannot replicate the current law banning STRs because it conflicts with State law which allows them and the grandfather status is moot. 

In an email to the Mayor and City Commissioners following the appeals court ruling, Miami Beach City Attorney Raul Aguila noted, "There is also the same troubling ambiguity in it that we faced with the lower court’s order as well; that is, it is arguable that both orders speak to the fines as being in excess of what State law allows. I am not clear, nor am I ready to concede, that the 3rd DCA void[s] our underlying STR ordinance." The City requested a rehearing and was granted a stay of the trial court order until a ruling is made on the rehearing request.

"Finally, as we continue to study the order, I will be providing you with a legal opinion with regard to what I consider to be the most critical issue... that is, whether we proceed to amend our existing fine schedule to conform with State law (which I think we should) and whether, having done so, we have therefore complied with the courts’ orders, and our STR ord. — as amended— remains in effect."

The proposed ordinance on the Commission agenda this week will start as a referral to the Planning Board for its September 22 meeting then come back to the Commission for two readings before it can be enacted.

In the memo accompanying the item, Aguila points out the only impact of the amendments is to delete the fine amounts as well as the restriction that prohibits the Special Master from waiving or reducing the fines. It leaves the rest of the ordinance – that which would be grandfathered under the City’s interpretation of severability – intact, thus maintaining the ban.

In a footnote, Aguila added, “[The amendments] do not regulate the duration or frequency of rental of vacation rentals, nor do they repeal or otherwise amend remaining unchanged provisions of the City’s subject short-term rental ordinances.”

Photo: Shutterstock.com

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