Miami Beach slashes fines for illegal short-term rentals

Property owners in Miami Beach caught illegally renting homes, apartments and condos on a short-term basis will no longer face fines of at least $20,000. Instead, first-time offenders can expect to pay $1,000 a day, and repeat offenders will be fined $5,000 per day, after the Miami Beach City Commission amended the city’s short-term rental law on Wednesday.

Mayor Dan Gelber and the six city commissioners unanimously approved the changes without any discussion. According to a memo from City Attorney Raul Aguila, the new fine structure complies with a Third District Court of Appeals ruling against Miami Beach. In July, the appeals court rejected the city’s petition to overturn a lower court ruling determining the city’s five-figure fine structure exceeded those established by Florida law.

“The Third District’s ruling of preemption was limited to the city’s fines and did not find that the city’s short-term rental restrictions themselves were unlawful,” Aguila wrote. “The court further expressly upheld the severability of the fines from the remainder of the city’s short-term rental regulations, thus confirming the validity of all remaining provisions in the city’s short-term rental laws.”

Miami Beach only allows short-term rentals in certain areas of the city. In recent years, the advent of Airbnb and other short-term rental websites has led to a proliferation of short-term rental properties in zones where such uses are prohibited — prompting a city crackdown.

Under the previous structure, the city hit property owners with a $20,000 fine for the first violation. Each subsequent violation would cost a property owner between $20,000 to $100,000, depending on how many times the city caught them illegally renting homes on a daily, weekly or monthly basis.

To conform with state law, the city will now only fine property owners $1,000 a day for the first offense and $5,000 a day for repeat violations.

The court rulings stem from a 2018 lawsuit filed by Natalie Nichols, a real estate investor who used to rent her house at 1531 Stillwater Drive. The property is located in Miami Beach’s Biscayne Point neighborhood where short-term rentals are banned. Nichols stopped renting the property when the commission enacted the fines starting at $20,000.

In October 2019, Miami-Dade Circuit Court Judge Michael Hanzman ruled in Nichols’ favor. He determined the exorbitant short-term rental fines were unconstitutional and violated state law.

Miami Beach has also been at odds with Airbnb. Last year, the company and the city settled a federal lawsuit brought by Airbnb, which challenged the city’s requirement that business and resort tax information be displayed for Miami Beach listings on the short-term rental platform.

Under the settlement, Airbnb agreed to provide mandatory fields for hosts to fill out their business and resort tax information that the city will have to verify on its own. Airbnb will also not allow any listings that do not include the tax numbers.