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Miami Beach’s $20,000 fines for illegal Airbnbs struck down in court

Miami Beach is on the ropes again in the city’s seemingly never-ending battle with Airbnb.

On Monday, a Miami-Dade circuit judge struck down the city’s law that fines homeowners $20,000 for illegally renting their places short term on sites such as Airbnb. The city said Tuesday that it would appeal.

Miami Beach first instituted its escalating fine structure — $20,000 for the first violation, $40,000 for the second, $60,000 for the third, $80,000 for the fourth, with a max of $100,000 for each offense after that — in March 2016. The city’s fines are the most expensive in the country for illegal short-term rentals.

The court ruling was first reported by Miami Beach blogger Susan Askew.

In 2018, Miami Beach resident Natalie Nichols sued the city, challenging its steep fines and the ban as a whole. The Goldwater Institute, which represents other Airbnb hosts across the country, filed the lawsuit on her behalf.

“This ruling vindicates the property rights of all Miami Beach homeowners who share their homes as short-term rentals,” said Goldwater Institute attorney Matt Miller. “Home-sharers in Miami Beach no longer have to fear that they will end up in financial ruin for exercising this essential property right.”

In his ruling, Judge Michael Hanzman prohibited the city from enforcing the current fines, saying they are in “jarring conflict with [state law] and are therefore illegal and unenforceable.” Florida law prohibits local governments from fining residents more than $1,000 a day for code violations.

Despite the ruling, the city’s spokeswoman, Melissa Berthier, said the fines are still in effect and that the city’s code enforcement would continue to enforce the ordinances. Mayor Dan Gelber said the fines are justified based on how lucrative the short-term rental market is for homeowners. Lower fines the city had used previously did not deter illegal short-term renting, he said.

“Our fines are high but on the other hand, the amount they’re getting is commensurate with that,” he said.

Short-term rentals have been illegal in Miami Beach for years, but that hasn’t stopped the market from flourishing. The city licensed fewer than 1,000 short-term rentals as of this summer, but approximately 4,500 entire homes are advertised on Airbnb, according to market data from BNBVestor, a short-term rental analytic company.

Miami Beach prohibits rentals of six months or less in most residential areas, but allows them in a few sections of the city such as a stretch of Harding and Collins Avenues. Hosts are required to obtain a business license and resort-tax registration certificate.

The number of short-term rental investigations in Miami Beach has nearly tripled in the last five years, from around 600 during the 2013-14 fiscal year to more than 1,700 last year. To cite a property owner for operating a vacation rental, code enforcement officers visit the property while it’s being rented and secure confirmation from guests.

The fines started out small, from $500 to $7,500. In March 2016, the city raised the fines to $20,000. From March 2016 to March 2019, Miami Beach’s code compliance department issued violations for 260 units and issued $13.3 million in fines. Many property owners appealed, and that amount dropped down to $8 million. By June of this year, the city had collected around $500,000 in fines, or 6 percent of the amount it had issued since March 2016.

If Monday’s ruling outlawing Miami Beach’s fine structure stands, the city is going to have a hard time rooting out illegal Airbnbs because a 2011 state law prohibits cities from creating new restrictions on short term rentals. The city was able to impose the 2016 fine structure because it was added as an amendment to the 2010 law.

Gelber said if the city’s appeal fails, there is still a recently passed ordinance requiring short-term rental properties to provide the city with a Business Tax Receipt and Resort Tax Certificate Number. The city added the guidelines to its existing tax law, meaning they aren’t in conflict with Florida’s 2011 short-term rental regulation ban, Gelber said.

The city announced in August that it would prosecute hosts who submit bogus license numbers to get around the ordinance. When the Herald followed Miami Beach code enforcement officers responding to short-term rental complaints in March, several booked apartments had fake registration numbers.

The penalty for the criminal violation is 60 days of jail time and/or a $500 fine.

“You still have an enforcement mechanism,” Gelber said.

Nichols’ lawyer said Monday’s victory marks an end to the city’s crackdown on short-term rentals.

“It was a very powerful ruling,” Miller said. “If the ordinance is struck down, they are prevented from state law for passing a new law on short term rentals.”

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Taylor Dolven covers the tourism industry at the Miami Herald, where she aims to tell stories about the people who work in tourism and the people who enjoy it. Previously, she worked at Vice News in Brooklyn, NY, where she won a Front Page Award from the Newswomen’s Club of NY for a national investigation of police shootings.
Martin Vassolo covers the politics and government of Miami Beach for the Miami Herald. He began working for the Herald in January 2018 after attending the University of Florida, where he served as the editor-in-chief of The Independent Florida Alligator. Previously, he was a general assignment reporter on the Herald’s metro desk and a political reporting intern.
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