Miami Beach scaling back fines
We have been closely watching the debate about short term vacation rentals through the various platforms that allow citizens to lease their homes in what we all know as the “shared economy.” Often in state legislative hearings, local elected officials will plead with legislators to allow them flexibility under what is commonly called “home rule” so they can definitively outlaw what many consider short term rental as community nuisances with too many cars and too many renters packed in a rental home. The legislature has gone to great lengths to provide what it calls “property owner rights” so homeowners can offer their homes when they want and to whom they want. In fact, a bill that would have definitively given the state rather than municipalities powers over those rentals failed this past session. So some cities continue to regulate or outright ban vacation rentals, and in the case of Miami Beach, to weigh hefty fines – until now.
Florida’s Third District Court of Appeal in late July upheld a lower court ruling that the city of Miami Beach is violating state law with its fines for illegal vacation rentals. Those fines start at $20,000 for the first violation and increase to $100,000 for a fifth and subsequent violations. The court in its review of City of Miami Beach vs. Natalie Nichols noted per Florida Statute that a city’s fines “shall not exceed $1,000 per day per violation for the first violation, $5,000 per day per violation for a repeat violation, and up to $15,000 per violation if the code enforcement board or special magistrate finds the violation to be irreparable or irreversible in nature.”
There is some question whether the court ruling strikes down the city’s entire ordinance prohibiting short-term rentals. While the city decides whether to appeal to the Florida Supreme Court, its attorney has recommended the city scale back the fine structure to comply.
With respect to how these short term rentals affect the insurance industry, some homeowners forget to tell their property insurance company that they are in the rental business and if an accident happens, there may not be coverage unless the homeowner went to the market and purchased a commercial liability policy. We can share more if you are interested and especially if you are in the short term rental business!
LMA Newsletter of 8-17-20