LTC 061-2019 Tracking of Total Short Term Rental Violations Imposed Against Property Owners MIAMI BEACH
OFFICE OF THE CITY MANAGER
NO. LTC # 061-2019 LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members . the City •. mission
FROM: Jimmy L. Morales, City Manage
DATE: February 1, 2019
SUBJECT: TRACKING OF TOTAL SHORT T RM RENTAL VIOLATIONS IMPOSED AGAINST
PROPERTY OWNERS
The purpose of this Letter to Commission (LTC) is to provide an update on the City's tracking of
total short term fines imposed against property owners. The Finance and Citywide Projects
Committee, at their July 27, 2018 meeting, instructed Administration to provide a status update
in six months via LTC.
Background
The City of Miami Beach Commission, at their March 9, 2016 meeting, adopted Ordinance
2016-4001 and Ordinance 2016-4002 which amended Chapter 142-905B and 142-1111 of the
City Code respectively. The two Ordinances established the following fine structure for illegal
short-term rental violations:
A. If the violation is the first offense: $20,000.00.
B. If the violation is the second offense within the preceding 18 months: $40,000.00.
C. If the violation is the third offense within the preceding 18 months: $60,000.00.
D. If the violation is the fourth offense within the preceding 18 months: $80,000.00.
E. If the violation is the fifth or greater offense within the preceding 18 months:
$100,000.00.
Additionally, at its March 9, 2016 meeting, the Commission established a procedure requiring
the Director of the Code Compliance Department to remit a letter to the Miami-Dade Property
Appraiser and the Miami-Dade Tax Collector, together with a copy of the Special Master Order
adjudicating the violation, notifying these governmental agencies that a single-family residential
property was used for transient rental or occupancy. This action may result in a homesteaded
property owner losing their tax exemption status.
At the October 31, 2017 City of Miami Beach Commission meeting, a discussion item regarding
the tracking of total short-term rental violations imposed against property owners was referred to
the Finance and Citywide Projects Committee for discussion.
The Finance and Citywide Projects Committee heard this item at their December 15, 2017
meeting. The Committee instructed Administration to report back in six months with an update.
At the July 27, 2018 meeting the Committee instructed Administration to begin providing the
updates via Letter to Commission.
Analysis
Since the implementation of the City's new fine structure for violators of the Short-Term Rental
Ordinance in March 2016, the City's Code Compliance Department has issued a total of 431
violations which equates to a total of $13.3 million in initial fines assessed. The violations are
summarized below:
Short-Term Rental Violations
Issued To: Violations Appealed Closed Fines Fines Notice
Owed Paid Phase
Property Owners 405 84 101 111 91 18
Agent/Third 18 1 3 2 0 12
Party/Other
Tenant 8 1 0 6 1 0
Total 431 86 104 119 92 30
The City Attorney's Office entered into 40 Agreed Orders. These 40 Agreed Orders had
violations totaling $1.3 million that settled for $300,500. Additionally, 89 violations have been
administratively closed out for the following reasons:
• 65 — Nolle Prosequi
• 17 — Special Master Dismissed
• 6— Closed by Action Memorandums
• 1 — Issued in Error
The remaining violations equate to approximately $7.9 million dollars, which is summarized
below:
Short-Term Rental Fines
Fines Total Paid/Closed Appealed Fines Notice
Issued to: Owed Phase
Property $7,462,750 $462,750 $2,675,000 $3,760,000 $565,000
Owners
Agent/Third $345,000 $0 $65,000 $40,000 $240,000
Part /Other
Tenant $185,750 $750 $20,000 $165,000 $0
Total $7,993,500 $463,500 $2,760,000 $3,965,000 $805,000
The City has collected $463,500 of the $7.9 million in fines assessed. It is estimated that
approximately $7.8 million in fines issued to Property Owners may be recovered over time as a
result of City liens issued and recorded against the subject properties engaged in short-term
rentals. These fines appear on lien statements (estoppel letters) as an amount shown owed to
the City and are recovered at the time of sale or refinancing. Of the 119 cases in "fine owed"
status, 111 were issued to owners which the City has the ability to lien.
The Code Compliance Department now handles recording liens associated with code violations.
As of December 2018, 60 properties have had the owner notified of intent to lien, which equates
to the total amount of $2,486,500. Note that some properties may have more than one violation.
In addition, the City has recorded liens on 21 properties, which equates to a total of $1,099,500.
Of the remaining owners with violations in "fine owed" status, 17 were adjudicated by the
Special Master and given longer pay back periods. Staff continues to work diligently to initiate
liens on the remaining violations.
JLM/JW