Coral Gables sues FlipKey over illegal short-term rentals

Airbnb and Homeaway are working out agreements with the city

May.May 17, 2017 09:45 AM

Flipkey and Coral Gables Mayor Raul Valdes-Fauli

While Coral Gables plays nice with two short-term vacation lodging companies, city officials are taking a third firm to court.

City Attorney Craig Leen told The Real Deal that Coral Gables is hammering out agreements with Airbnb and Homeaway to stop illegal short-term rentals in residential neighborhoods. However, Coral Gables had to sue TripAdvisor-owned FlipKey because the company has ignored warnings and citations about allowing Coral Gables residential property owners to advertise short-term vacation rentals on its web application, Leen said.

“The city is very protective of its residential areas,” Leen said. “We do not allow commercial activity or overnight accommodations in residential neighborhoods. FlipKey never responded to a cease and desist letter. The city gave the company a citation and they didn’t respond to that either.”

TripAdvisor CEO Stephen Kaufer did not respond to a message left on his voicemail and a FlipKey spokesperson did not respond to an email request for comment.

Leen said Coral Gables also sent cease and desist letters in early January to Airbnb and Homeaway. “We were contacted by both to work the matter out,” he said. “We are in the process of doing that. We would still enforce our code and they would help out.” The city is working out agreements that would last for six months, he said.

At the May 9 city commission meeting, Leen told Coral Gables elected officials that his office would prepare a letter stating short-term rentals in residential neighborhoods are prohibited. Airbnb and Homeaway would then provide that letter to its hosts in Coral Gables and the companies would also post it on their websites. Leen also said both companies would not interfere with code enforcement actions, but would not provide personal information about the hosts to the city.

“I think it is a good compromise and a good solution,” said Mayor Raul Valdes-Fauli.

In a company statement, an Airbnb spokesperson told TRD that the company and Coral Gables worked in good faith to reach a practical solution. “Over the next six months, we look forward to furthering our partnership with Coral Gables to help develop fair and sensible home sharing rules that work for everyone,” the statement said. An email to Homeaway’s media department requesting comment was not returned.

According to the city’s May 8 lawsuit in Miami-Dade Circuit Court, Coral Gables is seeking an injunction barring FlipKey from listing properties in Coral Gables. FlipKey ignored the city’s initial Jan. 4 warning to stop listing Coral Gables homes and apartments by the 15th day of that month, the lawsuit alleges.

The city sent a citation on Jan. 18 addressed to FlipKey’s then-vice-president Tracey Zehn at the company’s Boston headquarters stating the company would start accumulating daily fines of $500. However, Zehn left the company shortly thereafter to become president of Zipcar. According to Leen, FlipKey missed a deadline of Feb. 7 to request an administrative hearing and has accrued $59,000 in fines, plus a $108 administrative fee.

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