Any number of laws can affect rentals of South Florida properties. At the federal level, for example, property owners must comply with the Fair Housing Act. At the state level, for example, property owners must also comply with the Florida Fair Housing Act and building codes. At the county level, there are additional building and zoning, minimal housing standards, taxes and other restrictions. At the municipal level, cities can enact their own ordinances and taxes. Finally, within condominium and homeowners associations, property owners must also comply with the governing documents.
What does this mean in the era of Airbnb?
Many property owners seem to think that as soon as they complete their listing their property on Airbnb, they’re good to go. That’s simply not the case. The property must quality for rental on a short-term basis. The property must also have a valid certificate of use (also known as a C.U. or zoning permit). The property owner must apply for the certificate of use, pay the application fee, make sure the property passes life-safety inspections (such as fire) and continue paying fees annually. The property owner must apply for a business license, pay the application fee and thereafter pay the resort (hotel) tax to the county or city, sales tax to the state and any other operating taxes. Of course, the property owner must continue paying the property taxes, making sure not to take a homestead exemption for a rental property.
In Miami-Dade County, in May 2017, Airbnb agreed to collect the county’s resort tax from the property owners and remit that money to the county monthly. However, the agreement did not address whether properties could be rented on a short-term basis. In October 2017, the county passed new short-term rental requirements, including, applications for certificates of use, acknowledgements regarding homestead exemptions, notices regarding disabled visors, notification to condominium or homeowners associations, and more. The rules also included fines, from $100 for the first offense to $2500 for the third offense within 2 years. Notably, the agreement between Miami-Dade County and Airbnb excludes properties within cities, many of which have their own resort taxes and restrictions. CLICK HERE FOR MIAMI-DADE COUNTY INFORMATION
In December 2018, the City of Miami scored a victory in its short term-restrictions. The Third District Court of Appeals upheld a ban on rentals in residential neighborhoods for less than 1 month. Nevertheless, the city’s new leader, Mayor Francis Suarez, indicated that he was open to reaching an agreement on the issue and seemingly holding off on fines.
In the City of Miami Beach, rentals for less than 6 months are banned in most residential areas. Some sections of the city, which can be confirmed on zoning maps, are approved for rentals of less than 6 months. CLICK HERE FOR MAP In 2016, the city passed an ordinance setting the first fine for violation of the short-term restrictions at $20,000, with each subsequent fine increasing by another $20,000, up to $100,000. They are the highest fines in the country. Several property owners have sued. Most recently, the city passed a new ordinance requiring all property owners to include business license and resort tax registration numbers on all short-term rental listings, and imposing additional fines. Airbnb sued to halt the new restrictions in January 2019.
Broward and Palm Beach counties have similar agreements on taxes and yet continued ordinances and disputes on policing of listings for business license and resort tax information.
What if your property is located within a condominium or HOA?
For properties within community associations, property owners must comply with federal, state, county, city laws and the governing documents of the association. Rental restrictions in a condominium or homeowners association must be located within the declaration of condominium or amendments thereto (for condominiums) or within the declaration of covenants or amendments thereto (for homeowners associations). These documents are usually available online at the county recorder’s office. They are also available from the association directly.
Some associations attempt to sneak in rental restrictions by rule, where only the board of directors votes on the restriction. These are generally not permitted. To add rental restrictions, associations must amend their declarations, usually requiring a high percentage of owner approval. Even in the case where an association amends its documents to prohibit rentals entirely, to alter the duration of the rental term or to specify or limit the number of times the owners are permitted to rent within a year, current owners could be grandfathered-in, so long as they do not consent to the changes.
What is the moral of the story?
Be informed. Analyze the federal, state and local laws affecting your property. Analyze your condominium or homeowners association documents. Educate yourself before consenting to rental restrictions. Keep up to date.
Mary Ann Ruiz, P.A. is a law firm representing South Florida property owners, based locally, domestically or internationally.
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