The City of Miami Beach appears to have lost a major battle in its war on short-term rentals following a recent decision by Florida’s Third District Court of Appeals, which declares that the City’s excessive fine structure is illegal under Florida law. Short-term vacation rentals have surged in popularity in recent years, in large part due to the popularity of a growing list of online marketplaces such as Airbnb and Vrbo, which have helped to connect property owners with vacationers seeking an alternative to traditional hotels. On the other hand, this trend is not so popular among neighboring homeowners, leading some municipalities to impose restrictions on short-term vacation rentals.
The City of Miami Beach has helped lead the charge against vacation rentals, banning short-term rentals of certain properties within specified zoning districts. Determined to bring vacation rentals to a halt, the City’s crackdown efforts resulted in the creation of an “alternate code enforcement system,” authorizing massive fines against property owners found to be in violation of the City’s short-term rental ordinances. Specifically, Section 142-1111 of the City’s Code prescribes penalties of $20,000 for the first offense, $40,000 for the second offense, $60,000 for the third offense, $80,000 for the fourth offense, and $100,000 for each subsequent offense.
In October, Circuit Court Judge Michael Hanzman ruled that the City’s fines exceed mandatory state limits on municipal penalties. On Wednesday July 22, the Third District Court of Appeals affirmed that ruling. Citing to Section 162.09, Florida Statutes, the Court held that municipal fines may not exceed $1,000 per day for the first violation, $5,000 per day 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. The Court soundly rejected the City’s argument that the City has the right to “opt out” of the caps on fines imposed by the state legislature by creating its alternate code enforcement system. Per the Miami Herald, because the appellate court’s decision is not yet final, the City will temporarily continue to enforce its ordinance while it mulls its legal options regarding a possible motion for rehearing or a petition for review by the Florida Supreme Court.
Bitman O’Brien & Morat has a team led by Ronnie Bitman that handles property law. To learn more about our expertise and how we can assist you in these areas, please contact us at 407.815.3110 or visit bitman-law.com.