Flagler County’s vacation rental ordinance has passed its first legal challenge, with Judge Michael Orfinger upholding all but one aspect of the ordinance in deciding a case brought by vacation rental owner Steve Milo.
“This is drawing to a close a Herculean effort by staff, from the original planning, to the fight in the legislature,” County Commissioner Barbara Revels said at a Monday, June 1 meeting. “We’ve got the lead ordinance that many people will look to, and I’m very proud of that.”
The case was argued in a four-hour hearing Wednesday, May 27, and concluded with Orfinger’s release of a decision the morning of Monday, June 1. (Click HERE to view the decision.)
“Essentially the court has upheld our ordinance with one minor exception,” County Attorney Al Hadeed said in his comments to the commission Monday. “It determined that it achieves a valid governmental purpose, that it is not arbitrary and capricious and that it complies with the Florida constitution.”
The exception was Milo’s argument that the ordinance would illegally impair existing contracts that vacation rental owners entered into with clients before the county adopted its ordinance.
“So for example,” Hadeed said, “let’s say that the middle of January somebody booked something this summer where they rented for 24 people to occupy that short-term vacation rental. Because they validly entered into it before our ordinance, and we may not retroactively legislate to impair that contract, that rental can go forward at that number” under the judge’s decision. Otherwise, under the county’s ordinance, a rental would be limited to 10 people in a single family home or 16 people in a double-family home.
But in the case of the primary argument — that municipalities were preempted by enacting such regulations by state law — “the court held very clearly that no, we were not preempted,” Hadeed said.
The Flagler County case was closely watched, Hadeed said, by other counties and municipalities interested in enacting their own restriction on the rentals after the state legislature last year repealed a 2011 law that had barred municipalities from regulating the rentals themselves. The issue of vacation rental regulation may still make its way to the Florida Supreme Court, he said.
But the Flagler County case, Hadeed said, “is the gate that would either allow (other municipalities), if the gate were opened, to regulate, or if the gate would be closed, it would forbid them from regulating. And essentially what the court stated was that it was very clear in the 2014 legislation that the legislature did intend to give us regulatory authority, provided that we do not prohibit vacation rentals, which he found our ordinance did not, and did not regulate their duration or the frequency of rental of vacation rentals.”
County Commissioners Frank Meeker and Charlie Ericksen made multiple trips to Tallahassee last year to push for the law’s repeal after county residents complained that “McMansions” — sometimes built for the sole purpose of serving as rentals for as many as two-dozen people at a time — were harming other residents’ quality of life.
Milo, who manages multiple rentals in Flagler County through the his company Cinnamon Beach Way, LLC, opposed the effort to overturn the law. And when the county passed an ordinance Feb. 19 regulating the rentals, he filed suit within weeks, seeking an injunction barring the county from enforcing the ordinance.
Milo’s suit, prepared by attorney Peter Heebner, also alleged: that the rentals were already subjected to state and local regulation, that the fact the ordinance only applied to rentals east of US1 and not to condos constituted unequal treatment, that the ordinance was unconstitutionally vague in its quiet hour requirements, that its requirement for rentals owners to designate a “responsible party” to handle the rentals was preempted by state law, that it violated renters’ rights by requiring short-term leases to contain the names and ages of anyone occupying the rental property, that it would cause Milo financial harm by restricting the rentals’ use and barring the transfer of their vested property rights if the properties are sold, and that the ordinance illegally impairs contracts that vacation rental owners have already entered into with future clients.
Orfinger found in favor of the county on all but the last point.
“I think it’s a very valuable finding for us,” Hadeed said.