Cities Battle Vacation Rentals Through Fines That Often Go Unpaid

It’s a battle going on for years but not getting any easier.

Cities like Miami Beach prohibit short-term rentals in residential neighborhoods because they are concerned about the quality of life for year-round residents.

The effort has been criticized by vacation rental sites like Airbnb and some homeowners who believe they should be allowed to decide for themselves if they can rent their homes for short periods of time.

On weekends, Miami Beach Code Enforcement officers respond to calls about illegal short-term rentals on the beach.

They wear bodycams to record what they find. Some of the footage shows luxury homes turned into party houses.

Eventually, officers break up the parties and ask guests to leave because short-term home rentals are illegal in residential neighborhoods.

On May 12, 2018, bodycam video shows code enforcement officers responding to a multi-million dollar home in Miami Beach.

A guest of the home comes out and tells officers, “Chris Brown’s in there.”

That same day, video of celebrity Chris Brown dancing inside a home surfaced on social media. The home looked just like the one code enforcement responded to.

The NBC 6 Investigators rode around on a Friday night with Officer Jorge Hernandez. It’s his job to respond to complaints from angry residents about nearby party houses.

“The last thing you want is a party house next to you in a residential area that they’re having constantly parties and people that you don’t know, a neighborhood is a neighborhood,” he said.

Hernandez responded that night to a call of an illegal short-term rental at a condo complex on Collins Avenue.

Short term rentals are allowed in that part of the city but Hernandez says this particular unit doesn’t have permission from the city or condo to rent short term.

When he knocked on the door, a group of tourists from Chicago came to the door. They told Hernandez they paid $3,000 to stay there for three days. They told him they rented the unit on Airbnb.

Miami Beach has concerns that Airbnb doesn’t check the locations of short-term rentals on the website to ensure they are not in areas where it’s prohibited and the company doesn’t publish addresses so renters can check that out for themselves.

“We know that if they wanted to, they could come up with a way to only rent legally,” Miami Beach City Manager Jimmy Morales said.

The City recently began fining online companies that advertise illegal rentals.

For some time, they’ve been giving homeowners who rent their home illegally $20,000 fines per violation.

“The reason we do that is because they’re not making $500 a night on Miami Beach,” Morales said. “Sometimes when they’re renting these beautiful big houses on the ocean or on the bay they’re getting $5,000-$6,000 a night. If you have a $500 fine, it’s the cost of doing business.”

In a statement, Airbnb told NBC 6, “We are disappointed by the city’s decision to double down on a law that even they admit isn’t working… our hosts and residents in Miami Beach deserve comprehensive short-term rental reform that addresses the fundamental flaws in the city's existing system.”

The house where Chris Brown and other celebrities were said to be partying was advertised on Airbnb for $2,395 a night.

The owner already has seven violations and is appealing $100,000 in fines.

We found not every homeowner knows what’s going on in their house.

“I didn’t know they were going to be running 20 people through my house,” said Lisa Almy, the owner of a luxury home in a residential area of Miami Beach.

Code Enforcement bodycam video shows the city has responded several times to the home she owns that was being rented on Airbnb.

She is seen on the video telling officers that she leased her property to a company called VACAYO for a year and they’re the ones who put it on Airbnb.

“I’ve been trying to get them out,” she told them but was still hit with $20,000 in fines for each time she’s been cited for the illegal short-term rental of her home.

“I was told that they had high-level executives that were vetted that they had a good reputation for and I believed them,” she told NBC 6 about the information she was given when she leased her home to VACAYO.

Beatriz Hernandez also says she leased her Pinecrest home to VACAYO for a year under the same understanding only to discover it was put on Airbnb as sleeping 16 plus guests.

“The idea they presented was that this was going to be for corporate rentals,” she said.

Hernandez says on one occasion, she saw about a dozen cars in the driveway.

“They had the bedroom window open. One of the people that was here, a young man was standing outside,” she recalled. “We drove by and he saw my daughter and I staring to see what was going on and he actually shot a finger at us.”

Pinecrest does allow short-term rentals but requires people to get permission first. In her case, VACAYO didn’t get that permission. When a neighbor complained, Beatriz was fined.

“They flat out know that to a large extent what they are doing is exposing the homeowner to the liability,” said Carlos Ziegenhirt, her attorney. “They have no liability as far as what the county can do because the county is going to fine the property owner.”

VACAYO’s CEO declined our request for an interview.

Months ago, she told CNBC they have since got out of the leases where the short term rentals aren’t allowed.

But we discovered through court records they only left the homes after lengthy eviction battles.

When Lisa Almy got her home back, following a nine-month-long court battle, she says she had racked up fines totaling $100,000.

“I was paid a total of $4,500 for the entire time that they used my property. My legal bills were in excess of $16,000,” she said.

After appealing the fines, Lisa managed to get them transferred over to VACAYO. The company owes Miami Beach $140,000 in fines.

Since 2015, Miami Beach has issued fines totaling over $12.5 million but has only collected $427,000.

Lisa Almy tells us she is in favor of short-term rentals on the beach despite what she went through.

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