Miami Beach turned off a homeowner’s water to try to get him to pay $200,000 in short-term rental fines. It didn’t work.
On Monday Miami-Dade Judge Jennifer Bailey ruled that Miami Beach has to immediately restore water service to 3098 Alton Rd, which the city cut nine months ago in a last-ditch effort to get Ralph Serrano, 47, to pay up. Serrano sued Miami Beach last week for what he calls “constitutionally excessive fines” and “strong-arm tactics” related to the city’s short-term rental ordinance — the strictest of its kind in the country.
“I think this amounts to an emergency,” said Bailey of Serrano’s emergency request with the court to get the water restored. “This is a complete standoff over these fines.”
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Serrano, owner of Safe Harbor Equity, a distressed debt firm, bought the four-bedroom property for $1.3 million in 2015 and intended to live there himself until he found another suited property and started renting the place to long-term tenants, he said. One of those tenants rented out the property on vacation rental sites Airbnb and VRBO. Serrano was fined $20,000 for the first offense in March 2017, the lawsuit said, and quickly incurred $200,000 in fines under the city’s steep penalty structure.
In early 2018, the city revoked Serrano’s certificate of occupancy for the home and turned off the electricity and the water. Serrano, with his lawyer Christopher Spuches, appealed the violations and asked Airbnb and VRBO to take the listings down. He asked the city to reinstate the certificate of occupancy and turn the water and electricity back on so that he could rent to another long-term tenant. The city turned the electricity back on in May and reinstated the certificate of occupancy in June, city emails attached to the lawsuit show. But, despite the Miami Beach building department’s request that the water be turned back on, the city’s financial department refused until Serrano coughed up the $200,000.
Now Serrano will get his water back while the court considers two questions: Does the city have the right turn off water to compel homeowners to pay? And are Miami Beach’s fines constitutional?
“I’m very pleased,” Serrano said. “The city may have overstepped. This allows the home to be habitable.”
The city plans to appeal the judge’s ruling.
“This illegal behavior by the Plaintiff has caused numerous complaints from the surrounding neighbors, and has essentially resulted in the transformation of his residential property to a commercial hotel business operation in violation of the law,” said the city’s spokesperson Melissa Berthier. “The City of Miami Beach considers the Plaintiff’s allegations asserted in the lawsuit to be devoid of any legal merit, and the City of Miami Beach anticipates that the Third District Court of Appeal will reverse the order issued by the circuit court.”
This isn’t the first time Miami Beach has been sued over its sky high short-term rental fines. Miami Beach resident Natalie Nichols sued earlier this year, arguing that the fines are illegal because state law limits zoning board fines to $1,000 per day for the first violation and $5,000 per day for the repeat violation. In Miami Beach, it’s $20,000 for the first violation, $40,000 for the second, $60,000 for the third, $80,000 for the fourth, and $100,000 for each additional violation. Matthew Miller, senior attorney at the Goldwater Institute, who is representing Nichols said the next hearing in that case is scheduled for Jan. 9, 2019.