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Ordinance 84-2421 ORDINANCE NO. 84-2421 AN ORDINANCE OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING THE CODE OF THE CITY OF MIAMI BEACH BY ADDING ARTICLE II , CHAPTER 17 , ENTITLED: "DISCLOSURE REQUIREMENTS FOR CONVEYANCES OF LONG-TERM INTEREST IN HOTEL UNITS" REQUIRING DISCLOSURE OF CERTAIN MINIMUM CONSUMER INFORMATION PRIOR TO THE CONVEYANCE OF LONG-TERM INTERESTS IN HOTEL UNITS; REPEALING ALL ORDINANCES IN CONFLICT THEREWITH; PROVIDING FOR SEVERABILITY; PROVIDING FOR AN EFFECTIVE DATE. BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: SECTION 1. That the City Code of the City of Miami Beach be amended by the addition of Article II , Chapter 17 entitled "Disclosure requirements for conveyances of long-term interest in hotel units" to read as follows: SECTION 17-15 . Legislative Purpose; Scope This Ordinance requires certain minimum disclosures to be made prior to the sale, lease or other conveyance of long- term interests in individual hotel rooms or units, either for "investment" or "transient-residential" purposes, by providing that the person selling interests in such rooms or units discloses certain legal restrictions on the use and occupancy thereof. This Ordinance applies to the sale, lease, sublease , assignment, or other conveyance of long-term interests in individual hotel or motel rooms or units and not for the short-term rental of hotel, motel, or other transient accommodations. However, this Ordinance shall not apply to contracts for the conveyance of hotel or motel units to bona- fide third party purchasers that have been executed prior to the effective date of this Ordinance. SECTION 17-16 . Definitions All terms used in this Ordinance shall be interpreted and applied to achieve the legislative purpose stated in Section -1- • OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE-MIAMI BEACH,FLORIDA 33139 1 above. The following terms shall be defined as follows unless the context otherwise requires: a. Developer shall include any person or entity who at a point in time, owns or leases ten (10) units or 5% of the total number of units in any one building governed by this ordinance, whichever number is greater , and enters into a venture wherein long-term interests in rooms or units therein are sold or leased in the ordinary course of business, to bona fide third party purchasers. b. Sale and Lease shall include any and all forms of conveying long-term interests in hotel or motel rooms or units, including but not limited to outright sales , assignments of leasehold or other interest, and leases and subleases by Developers. c. Hotel and Motel shall include: (1) all buildings and facilities used or designed for use for transient occupancy, however they may be named, including all facilities licensed or zoned for hotel, motel or similar transient accommodations; (2) all buildings and facilities regulated by state or local authorities as hotels , motels or transient occupancy; (3) all buildings and facilities which describe or advertise themselves as hotels or motels or which offer transient accommodations to guests, or; (4) to the units within any structure, if the units are, in terms of applicable zoning, building maintenance, health, fire or building codes, restricted to use as hotel or motel rooms. In the event of any dispute as to whether a particular facility is a hotel or motel under this ordinance, reference may be made to the pertinent definitions of hotels and motels elsewhere within the Miami Beach City Code, zoning code, or property maintenance code. -2- OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE-MIAMI BEACH,FLORIDA 33139 d. Principal shall refer to any person holding an interest of 25 percent of more of any entity. e. Room(s) and Unit (s) shall refer to the sale or lease of a long-term interest in one or more individual hotel or motel rooms or units, with or without an interest in the common areas of such hotels or motels, whether or not the rooms or units therein are subject to the condominium or other form of ownership, but shall not include the sale or lease of interests in the hotel or motel as an entirety, nor in the underlying real property, nor shall this ordinance apply to mortgages pertaining to a hotel or motel. f. Long-term interest shall refer to the sale or lease of any interest in hotel or motel room (s) or unit (s) exceeding a term of five years, including but not limited to the outright sale of such individual room (s) or unit (s) , the lease or sublease thereof for a term exceeding five years, or the assignment of the right to occupy or use individual hotel or motel rooms or units for a period exceeding five years. All extensions or renewal periods contained in any agreement to sell or lease individual hotel or motel rooms or units shall be included in calculating the term of the interest conveyed. g. Buyer (s) , Seller (s) , Lessee (s) , and Lessor (s) . Unless the context otherwise requires, these terms shall refer to the parties to the contract, lease or other agreement conveying a long-term interest in individual hotel or motel rooms or units, as those terms are defined in this ordinance. SECTION 17-17 : Disclosure Requirements It shall be unlawful for any developer to sell or lease to any other person, any long-term interest in -3- )(0;0.0/ i OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE -MIAMI BEACH, FLORIDA 33139 individual hotel or motel units or rooms, without first making the following disclosures, if applicable, in the lease or purchase agreement or other separate disclosure document to the buyer , lessee, sublessee or assignee (as the case may be) in bold or underscored type, all in capital letters, at least as prominent (excluding headings) as any other statement contained in the contract or lease or other agreement which describes the proposed conveyance: a. "THIS IS A LEGALLY BINDING AGREEMENT WHICH SETS FORTH YOUR RIGHTS AND OBLIGATIONS REGARDING THIS TRANSACTION. YOU MAY NOT RELY ON ANY VERBAL ASSURANCES OR STATEMENTS MADE BY ANYONE CONCERNING THIS TRANSACTION." b. If there is a restriction under the applicable zoning code limiting the use of the hotel and motel unit to transient occupancy, the following: "THE BUILDING IN WHICH YOU ARE (PURCHASING OR LEASING AS APPLICABLE) A UNIT IS A (HOTEL OR MOTEL AS APPLICABLE) AS DEFINED BY LAW. THE ROOM OR UNIT WHICH YOU ARE (PURCHASING OR LEASING AS APPLICABLE) MAY NOT BE USED AS A PRIMARY OR PERMANENT RESIDENCE AND IS PERMITTED TO BE USED ONLY FOR TRANSIENT RESIDENTIAL PURPOSES. THE INSTALLATION OF COOKING FACILITIES IS PROHIBITED." c. In the event the hotel or motel is required by law to comply with Section 509 . 215 (Fla. Statutes) , and has not yet done so, the following: "THIS (HOTEL OR MOTEL AS APPLICABLE) MUST BE BROUGHT INTO COMPLIANCE WITH SECTION 509.215 (FLA. STATUTES) BY OCTOBER 1, 1988 UNLESS THE TIME IS EXTENDED PURSUANT TO THE TERMS OF THAT LAW. SUCH LAW REGULATES FIRE DETECTION AND FIRE SPRINKLER REQUIREMENTS FOR PUBLIC LODGING ESTABLISHMENTS. ALTHOUGH THE COST FOR SUCH WORK CANNOT BE -4- OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE-MIAMI BEACH, FLORIDA 33139 DETERMINED AT THIS TIME, THE OBLIGATION FOR BRINGING THE (HOTEL OR MOTEL AS APPLICABLE) INTO COMPLIANCE WITH SECTION 509.215 SHALL BE MET AS FOLLOWS: (Explain the responsibility for the payment of the cost for the installation of such equipment among owner or lessor and buyer or lessee) " d. The status of title for the property on which the hotel or motel unit is located must be disclosed in the following manner : 1. The name and address of the fee owner and all leaseholders and .subleaseholders to which the interest of the buyer or lessee will be inferior. 2 . All mortgages, judgements and other liens or encumbrances to which the interest being conveyed to the buyer or lessee will be inferior. 3 . A statement whether the items identified in subparagraph "1" and "2" above will be satisfied and/or released at the time of closing. 4 . A statement which shall state: "In case of default in any mortgage or other superior interest there is a possibility that the buyer or lessee' s interest will be divested. " Nothing herein shall prevent an owner or lessor from making additional disclosures not inconsistent herewith. SECTION 17-18: Persons to Sign the Disclosure Statements The above-described disclosure statements shall be signed by the developer and the principals of the developer or the attorney for the developer . In addition, the prospective buyer or lessee shall sign or initial each such disclosure statement, to acknowledge he has received and read the same. SECTION 17-19 : Good Faith Effort to Comply If a developer , in good faith, has attempted to comply with -5- r OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE-MIAMI BEACH,FLORIDA 33139 the requirements of this ordinance and if in fact has substantially complied with the disclosure requirement of this ordinance, non-material errors or omissions in the disclosure materials shall not be actionable unless the developer refuses to comply after having been notified of the error. SECTION 17-20: Violations/Enforcements a. Civil. In the event of any violation of any provision of this ordinance, the buyer or lessee shall have the following remedies: 1. A right of action for damages for a period of one (1) year after the date of closing; 2 . A right of recission for one (1) year after the date of closing, if no disclosure is made. 3 . In any action for relief under this section the prevailing party shall have the right to recover reasonable attorney' s fees. b. Criminal. Violations of this Ordinance shall be subject to a fine not exceeding $1 ,000, and a penalty not exceeding 30 days imprisonment. Each violation shall constitute a separate offense. c. Persons Liable . This ordinance shall be liberally construed to hold jointly and severally liable the developer, any corporate officers of the developer , any principal of the developer and any corporate officer of any principal of the developer for any violations of this ordinance. d. Cummulative Remedies. Nothing contained in § 17-20 shall prohibit the City from enforcing this Article by any other means including permanent injunctive relief. SECTION 17-21: Interpretation of Ordinance; Other Laws This ordinance is a health and safety measure to protect persons solicited to purchase, lease, or sublease individual -6- 0 OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE-MIAMI BEACH,FLORIDA 33139 hotel units or rooms on a long-term basis, either for investment purposes, for personal use and occupancy, or for resale or sublease to other individuals, by requiring that they be provided by the seller or lessor with basic information concerning legal restrictions applying to the use and occupancy of the premises to be conveyed. This ordinance should therefore be construed liberally to achieve its public-welfare purpose and to encompass and apply to all conveyances of the type encompassed by this ordinance, however characterized by the seller or lessor, to prevent avoidance or circumvention of the requirements of this ordinance. Contrarily., the ordinance should be interpreted and applied to avoid any interference whatever with all other types of real propery transactions and conveyances involving hotels and motels except for those involving the conveyance of long-term interests in individual hotel and motel units or rooms. This ordinance shall be enforced notwithstanding federal, state or local laws applying to hotels and motels or to real estate conveyances generally including condominiums and cooperatives, unless such other laws specifically and expressly prohibit the specific disclosure requirements of this ordinance, or unless the specific disclosure requirements of the ordinance are in direct conflict with the provision of state or federal law. Pursuant to Chapter 166 , Fla. Stat. (1983) , the ordinance shall be enforced within the jurisdiction of the City of Miami Beach notwithstanding the existence of other laws applying in the same field , absent federal or state legislation specifically in conflict with the provisions or expressly prohibiting or preempting the City from enforcing the provisions of this ordinance. SECTION 17-22: Statutory Intent It is the intention of the City Commission, and it is hereby ordained that the provisions of this ordinance shall become -7- OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE -MIAMI BEACH,FLORIDA 33139 and be made a part of the Code of the City of Miami Beach, Florida. The Sections of this ordinance may be renumbered or relettered to accomplish such intention, and the word "ordinance" may be changed to "section" , "article" , or other appropriate word. SECTION 2: Repealer All ordinances or parts of ordinances in conflict herewith be and the same are hereby repealed. SECTION 3: Severability If any section, part of section, paragraph, clause, phrase, or word of this ordinance is declared invalid, the remaining provisions of this ordinance , shall not be affected. SECTION 4 : Effective Date. This Ordinance shall take effect 60 days after its adoption, on September 9 , 1984 . PASSED and ADOPTED this 11th day of Jul--y, 1984. ,� 114'(/ Lam'" ' /` NiBYOR ATTEST: •. CITY CLERK 1st Reading - June 5 , 1984 (as amended) 2nd Reading - July 11, 1984 (as amended) LAD:bh FORM P -- OVED LEGAL DEPT. By- "Pv r Date__. x.. -8- • OFFICE OF THE CITY ATTORNEY-1700 CONVENTION CENTER DRIVE -MIAMI BEACH, FLORIDA 33139 •r1 . 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