July 22, 2020
By Matt Miller

Can Miami Beach fine property owners $20,000 to $100,000 for doing nothing more than renting their home for the night? Late last year, a Florida trial court said “no.” Now, today, the Third District Court of Appeal has affirmed that judgment, delivering Miami Beach property owner Natalie Nichols—the plaintiff in the case—a major victory in her ongoing challenge to the city’s unconstitutional restrictions on short-term rentals. This is a big win for Miami Beach homeowners—and it’s especially well-timed, given the hurdles property owners have been facing in Florida during the coronavirus pandemic.

The decision is based on a simple premise: The Florida legislature has expressly capped fines for property code violations at $1,000 for the first offense, and $5,000 for subsequent offenses. And Miami Beach’s fines grossly exceed those caps. As the court acknowledged, nowhere has the legislature “authorize[d] administrative monetary penalties in excess of the limits established” by state law.

Excessive fines are an ongoing problem in America’s cities and, while today’s ruling narrowly focused here on the conflict with state law, those fines are also unconstitutional. The city argued throughout the case that its fining authority is effectively unlimited. After all, if $100,000 fines for short-term rentals are constitutional, then there is effectively no limiting principle at all. Fortunately, courts are increasingly recognizing that the government’s power to police something is not unlimited, as both the U.S. and state constitutions—including Florida’s—have long recognized.

The ruling places important limits on Florida cities’ attempts to impose outrageous fines on the peaceful use of one’s property. But it does something else, as well: Under the decision, Miami Beach’s prohibition on short-term rentals has been struck down in its entirety. That is because the court declined the city’s request to rewrite the ordinance by striking down the fines while leaving the restrictions in place, just as the appellate court declined the city’s request to do so last year.

Therefore, today’s decision effectively legalizes short-term rentals in Miami Beach.

Miami Beach has long argued that it needs to ban short-term rentals in order to get rid of “party houses” and other nuisance properties. But the $20,000 to $100,000 fines were never about that. They did not apply only to nuisances or obnoxious parties—they applied to every short-term rental in the city (minus a handful of carve-out zones), no matter how peaceful. Miami Beach banned party houses, yes, but it also banned a single renter renting a home for the night and doing nothing more than watching TV or reading a book. Under today’s ruling, the city can continue to police actual nuisances, as all cities can. What it cannot do is ban short-term rentals or hand out ruinous fines.

Today’s victory is a light at the end of the tunnel for Miami Beach property owners, who have recently been pummeled in Florida, both by reduced travel during the current pandemic, and by Florida Governor Ron DeSantis’s unfair decision to shutter short-term rentals while hotels remained open during the crisis. 

During times of economic hardship, the ability to rent one’s property can sometimes make the difference between scraping by and being forced into bankruptcy. Ms. Nichols knows this all too well. During the Great Recession of 2008-2009, short-term rentals were what allowed her to hold onto the homes she owns today.

The Goldwater Institute brought Ms. Nichols’ case with the help of the American Freedom Network, the Goldwater Institute’s nationwide network of pro bono attorneys litigating for liberty. “Natalie Nichols’ rights as a homeowner were restricted in violation of the law by the city of Miami Beach.  We represented Ms. Nichols to provide her, and all the other homeowners in Miami Beach, relief from the extreme fines the city had imposed on home sharing,” said local attorney and American Freedom Network member Joseph van de Bogart, who was one of the attorneys who represented Ms. Nichols. “Florida cities should comply with the law and should not be permitted to fine home sharing out of existence.”

Having lost at both the trial and appellate-court levels, the city must now decide whether to seek discretionary review from the Florida Supreme Court. If it does, that petition would be due in one month, on August 21.

Matt Miller is a Senior Attorney at the Goldwater Institute. He is among the attorneys who represented Natalie Nichols in Nichols v. City of Miami Beach.

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