Short-term rental investor sues Miami Beach, seeks class action

Christian Conti alleges the city’s $20K fine and lien drove down the value of his South Beach condo

Miami /
Dec.December 08, 2020 09:45 AM
901 Euclid Avenue (Google Maps)

901 Euclid Avenue (Google Maps)

 

Miami Beach’s short-term rental crackdown is facing a new legal challenge just weeks after city leaders dramatically reduced the fines property owners have to pay for violating its regulations.

New York real estate investor Christian Conti is suing the city to recoup the money he paid to remove a lien on a South Beach condo he used to own, as well as monetary damages stemming from the property allegedly losing value due to Miami Beach’s restrictive short-term rental laws.

The lawsuit, filed last month in Miami-Dade Circuit Court, seeks class action status for any property owners who have been fined by the city for operating illegal short-term rentals.

“This civil-rights lawsuit seeks to vindicate plaintiff’s and all others similarly situated constitutional rights to be treated equally to other, similarly situated property owners; and to be free from excessive punishments for engaging in the peaceful, non-nuisance use of their property,” the complaint states.

Conti’s attorneys did not respond to requests for comment, and a Miami Beach spokesperson declined comment because the city has not been served.

In October, the Miami Beach city commission voted to reduce illegal short-term rental fines from $20,000 for the first offense to $1,000 a day and $5,000 a day for repeat offenders. The changes were the result of the Third District Court of Appeals upholding a lower court ruling that Miami Beach’s previous fine structure was in violation of state law. The city was charging outlaw short-term rental landlords $20,000 for the first violation and subsequent violations would cost a property owner between $20,000 to $100,000.

In October 2019, Miami-Dade Circuit Court Judge Michael Hanzman ruled against the city in a civil rights lawsuit brought by real estate investor Natalie Nichols, who stopped renting a home in Miami Beach’s Biscayne Point neighborhood on a short-term basis when Miami Beach enacted the five figure fine structure.

In his lawsuit, Conti also alleges Miami Beach violated his constitutional rights and ran afoul of state law when the city fined him $20,000 after he listed a condo at 901 Euclid Avenue as a short-term rental on one occasion in 2018. The city fined him $20,000 and recorded a lien on the property, according to documents attached to the lawsuit.

In order to convey marketable title to the Euclid property, Conti was forced to satisfy the short-term rental-based lien to avoid the threat of further enforcement action, the lawsuit states. Conti sold the condo in December 2019.

He owns a second investment property at 1614 Jefferson Avenue in Miami Beach, and would derive a meaningful revenue stream if not for the city’s short-term rental ban, Conti’s suit alleges.

“Further, the city’s ban on short-term rentals depressed the value of plaintiff’s Euclid property, and negatively impacted the ultimate sale price received for the property,” the lawsuit states. “And that ban is presently depressing the value of plaintiff’s Jefferson property.”

 


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