Wednesday, October 26, 2011

Report on the Legal Landscape – Protecting Yourself Before and After Government Action


Rental
It is easy to comment on Florida vacation rental restrictions – they are neither uniform nor consistent. The entire spectrum of the legislative landscape in the cities and sixty-seven Florida counties confirms the inconsistencies. Most cities have developed their own separate policies regarding regulating or banning short term rentals of single family residences. Some examples illustrate this point. Key West bans short term rental unless the property owner either has a scarce transient license or the property is located in Truman Annex with an amortized license. Miami Beach prohibits rentals that are less than six months and prohibits them from being rented twice in a calendar year.
The Village of Islamorada adopted an Ordinance that limited the total number of vacation rental licenses to 331, and provided for the ending of some rentals located in residential neighborhoods.
The City of Venice sought to regulate short term rentals by initially holding public workshops and hearings in order to obtain public feedback on regulating the rentals; and then without any hearing, adopted a rental ban. The Planning Director gave an interpretation that the rental of single family residences was a commercial activity that violated the zoning code. Fortunately, neither the Planning Commission nor the Circuit Court agreed with that interpretation.
As a result, the City of Venice paid $300,000 in legal fees to the challenged ban in addition to their hundreds of thousands of dollars in fees to their outside counsel.
The City of Venice then adopted a new short term rental ordinance whose key provisions included preventing resort dwelling activities in single family neighborhoods.
The City of Wilton Manors (near Ft. Lauderdale) sought to use code enforcement to limit the rentals of single family residences on a short term basis. The city’s appointed hearing officer ruled against the City and in favor of the property owners after conducting an evidentiary hearing. Essentially, the hearing officer ruled that the City failed to prove its case for enforcement.
The City of St. Augustine Beach initially considered a ban after one year on short term rentals, but later capitulated. This change of heart was due to threat of litigation with mediation involving some of the private property owners; editorials in the St. Augustine Record; and a large turnout of the public at commission hearings.
Unfortunately, these local governments seem to have forgotten that most of the real property rights we have today began centuries ago where battles raged over the taking of property by the Crown. The bundle of rights metaphorically and practically referred to as a bundle of sticks included transfer, sale, lease, bequeath, assign, mortgage, rent, and myriad variations of the ownership of private property. In order to transfer the property a Seller would transfer the bundle of sticks to the Buyer. The recipient Buyer would receive the entire bundle; not just one or two of the sticks. This transfer of sticks meant the Buyer received all of the rights that went with the purchase.

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