Monday, September 19, 2011

Fines & Jail Time: When Communities Overreach in their Vacation Rental Laws

I am in the process of reviewing a vacation rental Ordinance that many of the affected short term rental owners would describe as invasive and heavy handed. The law repeatedly threatens to take away the right of VR owners to rent their homes if they violate the rules. Some of the rules are reasonable, but some of them are petty and discriminatory.

Like many laws that regulate short term rentals, in this law the threat of losing the right to rent a property is not the only penalty that owners face. The community's laws also include clauses concerning Civil Infractions. In this one community the law discusses fines of $1,000. In a community I worked with a few years ago the proposed law included fines of up to $10,000 and jail time.

This approach seems to be exceptionally harsh, when you consider that:

          a) The major incentive for compliance with the ordinance for vacation rental owners is so that they can keep their rental license, and not lose their family’s investment in the community. Loss of the license is already a severe financial penalty. Is a $1,000 fine necessary too?

          b) Traditional law holds that you don’t penalize someone for the actions of someone else. If a guest’s 8 year old child is told to carry out the garbage, and a few items fall out of the garbage can onto the driveway next to the garbage can, the 8 year old or the child’s parents are “at fault”. Why should the owner be under the threat of a fine?

          c) Our laws generally call for equal treatment of all parties. If the same visiting 8 year old drops a few items of garbage, and then the 8 year old in a family that lives in the community year round also drops a few items of garbage, why should one action be subject to a $1,000 fine, and the other action be legal?

          d) If there is to be a fine, the existing fines seem to be excessive. City documents show that 90% of the “violations” by rentals have to do with parking, trash, and landscaping issues. We are unable to find any other laws in the community about parking, trash and landscaping that carry a $1,000 fine for violation.

          e) Those communities where Civil Law threatens jail time have really gone overboard.  Vacation rental owners are usually families investing for their future or trying to hold onto a family asset.  Threatening owners with jail time is clearly inappropriate.

In the community that I am currently working with, rental owners have lived with this law for several years, and the community's enforcement people have generally shown restraint in how they have applied the law.  But a bad law is a bad law, and sooner or later someone will suffer as a result.   Its time for vacation rental owners to get quite vocal about having to live with such problems.

Doug Coates
Oregon Association of Vacation Rental Owners

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