SHORT TERM RENTALS

This is going to be a new situation that HOAs, especially in the warm, tourit type communities, are going to deal with. This is the 3rd such ruling in Florida recently, another one being in Key West. I thought that some of our Board members might need to be made aware of this ruling.

SARASOTA, FL: March 19, 2008 — The rights of Venice property owners to lease out their homes for short-term rentals was upheld on Monday by the 12th Judicial Circuit Court, invalidating the Venice City Council’s ruling limiting home rentals to three per year.
“This is a clear victory for property owners everywhere,” said Valerie Fernandez, managing attorney with the Pacific Legal Foundation, a non-profit, public-interest legal organization which assisted in the case. “The court ruled unambiguously that, when governments seek to take property or even a portion of someone’s property, the owners must be justly compensated under the 5th Amendment,” she added.

In August of 2006, Tom Slaughter, the city’s planning and zoning director, declared that houses in single-family residential neighborhoods could not be rented for 30 days or less in excess of three times per year. Stephen Milo, owner of more than a dozen homes in Venice, appealed Slaughter’s ruling to the planning and zoning Commission. In May 2007, the commission agreed with Milo and invalidated the ruling. The decision was appealed to the city council.

In December 2007, the city council overturned the planning and zoning commission, upholding Slaughter’s decision to limit home rentals. At that time Mayor Ed Martin said, “The owners can accept that fact or go to court.”

“The mayor and the city council told us we go had to go to court, and that’s exactly what we did,” said Milo’s attorney, Rick Rumrell of Rumrell, Costabel, Warrington and Brock of Jacksonville. “The homeowners were able to come away with a significant victory for protection of their property rights. In fact, the court did exactly what the unanimous decision of the planning and zoning commission did -- reversed the erroneous opinion of the planning and zoning director,” he added.

The court’s order, written by Circuit Judge Robert Bennett, Jr., states “the court finds that the City Council’s Decision entered on December 13, 2007 is clearly erroneous. The City went outside of the essential requirements of the law by reversing the Planning Commission’s Decision and placing limitations on the duration and frequency of the rental of the Petitioners’ real property in the RSF Zoning District.”

The City had contended that short-term rentals are a business and, thus, not a permitted use of property zoned as residential single-family (RSF). However, the court noted, “Indeed, many rental properties, regardless of the rental term, are for-profit ventures and could therefore be characterized as ‘businesses’.” The decision went on to clarify that temporary residences, without limitations, are expressly allowed under City Code 86-81(a). “Property owners are entitled to rely upon the clear and unequivocal language of municipal ordinances. It is not possible for a property owner to anticipate that, for the purposes of the LDC [land development code], it would be necessary to look under Chapter 509 of the Florida Statutes, a chapter dealing with licensing and inspection of public lodging establishments, especially because there is no cross reference to Florida Statutes in the LDC,” stated the court order quashing the city council’s decision.

Brian,
That is why I posted it. There will be arguements for both sides--business or just living situations. Renting my unit out on an annual lease is what I do-- a business. My association also has "no business may be conducted from any unit" but we are allowed annual leases. ????? Go Figure!

There are Supreme Court Rulings on this topic. To prevent any
type of rentals is a taking of property rights. UNLESS, you are in a
condo/coop which is subject to FHA Rules. Guidelines can then allow
a percentage of rental units (not to exceed) in order to protect the
mortgage values. They still can not limit monthly, weekly, yearly in
an attempt to classify rental as a business.
Edie

i guess i have to ask, but isn't telling me i can't park more than two cars in a driveway taking away my property rights then? Isn't telling me i can't plant a cactus in my yard taking away my property rights? Or telling me i have only four colors to paint my home, two choices for windows, and that my curtains must be a certain color all taking away my property rights?

I kind of thought the entire "living in an HOA" was one more step in the reduction of "my property rights". You give up some rights every time you make a choice: to live in a particular state, to live in a county, to live in a city, to live in a neighborhood, to live in an HOA...every decision you make requires that you give up certain rights, for the opportunity to live there.

Robert,

I don't think it's only that way in SC. I think condos everywhere are the same; of course I may be mistaken and I hope someone here will enlighten me.

It's been my opinion that the outer shell of the condo, including the roof, is owned by the assn. The patio is generally defined as a limited common area. The grounds around the unit are common areas. Condo owners own a portion of the commn areas. In a planned community, the owner owns the whole unit including the grounds that surround his property. The assn only owns the common areas.

Mary

thanks Edie.. i have never heard of those seven rights, so this is new to me. Can you list all of them for me, just so i have them? Where do they come from? The state? Who grants them?

This is very interesting for me, an entirely new line of knowledge!

I guess HOA's have a choice. Allow people to rent them out or have the owners default with foreclosures/plumetting house values/failure to pay HOA fees. I'd take the rental option at least temporarily!

BrainB
Oh My! your asking me to remember real estate 101. After 30 years of
real estate brokerage, let's see. Seven Rights of a General Warrenty Deed
The right of possession
The right of Quiet Enjoymemt
The right of control & use
The right to benefit (rent)
The right to transfer
The right to exclude others
I only recall 6. Guess I need to go back to school for a
refresher course!! (smile)
Edie

BrianB
There are different deeds. A general warrenty deed is the highest form
of property rights being transfered. Your seven rights are universal also
known as common law ( Federal Rights) A general warrenty Deed can also have
language referring to the recorded covenants running with the land if in an
HOA. Anything recorded in the Court House pertaining to the property being
purchased can be included in the Deed of transfer. If you purchase a property
in a community subject to HOA Covenants, then you have to abide to those rules
(note I said rules not laws) Covenants cannot override LAWS. EXAMPLE:
A HOA Covenant can state "No American Flags allowed in yards" The Federal/State Laws
allow all people to display the American Flag. Therefore the HOA Covenant is illegal.
However, while the HOA cannot prevent the Flag they can under their HOA covenants
give the guidelines on height, placement etc. of how an owner can display the flag
in their yard. Hope this is helpful to you understanding.
Edie

thanks edie.. that helps. my last question:

how is losing your right to rent (if you move into an HOA that says "no rentals") a violation of your property rights, when losing your right to paint your house orange when you move into an HOA that says "No orange houses" is not a violation of your property rights?

Aren't they both a violation of your right to enjoyment and control? Why is one a violation, and the other not?

Edie,
Please comment.

With regard to losing your right to rent. The courts in several states have uphelp the right of associations to not allow renting in HOA and Condos. Some are complete bans, some restricted to a certain % of property. FHA will not or tends to not approve loans in condos that are over 30 % rentals, and some condos have imposed restrictions because of this requirement. Also in Condos, you have a deed that not only (stated or not) discribes your unit but also includes your % in the Real Property. When you sell you sell your space and the % of the real property, they are not partitioned. Lots of Florida Condo do not allow any renting of any kind, all high end stuiff but it is lawful. Also, you can sue for Criminalo conduct of Board members.