[REN #901] Real Estate: Florida Vacation Rental Owners Sue the Governor

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Real Estate: Florida Vacation Rental Owners Sue the Governor, Real Estate News for Investors Podcast Episode #901

The Florida governor is taking steps to restart the vacation rental business but some short-term rental operators are not very happy about the rules. Governor Ron DeSantis banned most short-term rentals in March, while allowing hotels and other kinds of lodging to remain open. Some have filed a lawsuit over a vacation rental ban that they feel has unfairly singled them out.

With the Memorial Day weekend approaching, financially strapped hosts are anxious to reopen and book guests, but they may not have enough time or the right kinds of guests. The Governor wants to see and approve county-by-county safety plans for the reopening of vacation rentals. He also wants to limit reservations to guests who are more local and not from places like New York.

Florida Short-Term Rental Shutdown

Florida short-term rentals were shut down on March 27th in response to the pandemic. That closure didn’t apply to hotels, motels, inns, timeshare condominiums, or resorts, however. They  have been allowed to operate with safety procedures for cleaning and maintenance. Some rental property owners say the policy amounts to a double standard, and some are now suing the Governor for what they call an unfair vacation rental ban. They say the Governor has shut them down without due process, and that they should be allowed to reopen.

The lawsuit offers an example of the kind of disparity that you’ll find in regard to condominiums that are used on a temporary basis by people who don’t live there. One is a vacation rental. The other is a timeshare. The lawsuit reads in part: “The Governor has allowed timeshares to openly operate, and it is not uncommon for one unit in a residential building to house a timeshare, while the exact same unit might be classified as a vacation rental, both used IDENTICALLY and cared for identically, but one is “essential” and one is “criminal.”” (1)

Florida’s Reopening Plan for Vacation Rentals

The Governor responded to the lawsuit in a statement that says, “Vacation rentals will be reopened as soon as the safety and well-being of Florida residents can be best assured.” Florida is currently engaged in Phase Two of the reopening process. The Phase Two guidelines say that hosts should only accept reservations from in-state individuals meaning for people who already live in Florida. They also specifically state that property owners should prohibit rentals to people traveling internationally or to people coming from a state hit hard by COVID-19. 

Other precautions include 72 hours between guests to allow time for cleaning and disinfecting. That’s three days, if you haven’t done the math. It also requires signage for guests with details on cleaning and sanitation procedures, as you might expect.

An attorney for one of the plaintiff’s, told “Click Orlando” that, “The challenged restrictions are underscored by the fact that even run-down and shabby motels can operate, while the most luxurious and well-maintained private vacation rentals are rendered unlawful…” The plaintiff represented by that attorney quote is Andrew Greenstein. He owns some luxury rental properties in Lake County, Florida. He says that he has a comprehensive six-hour commercial cleaning process that’s done by a crew of six people. That’s 36 hours of cleaning for each unit, and that was his cleaning procedure before COVID-19. 

In the Governor’s original executive order, it says that “many cases of COVID-19 in Florida have resulted from individuals coming into the state from international travel and other states, posing great risk to Florida residents.” He’s asking counties to submit their vacation rental reopening and safety plans but said, “If you tell me you’re going to rent them out to people from New York City, I’m probably not going to approve that, Okay?” He said, “If you’re saying that, you know, you’re going to rent it out to people from other parts of Florida or something, that would be manageable or if there’s a way (that clearly shows that) you have an eye to safety, then I’m fine.”

As reported by Florida Politics, the Governor explained his rationale for allowing hotels to remain open. (2) He said he needs the lodging for members of the National Guard and others responding to the pandemic. The ban on vacation rentals is also lifted for hosts that offer lodging to people providing services related to military, government, health or infrastructure duties. Business travelers staying for more than 30 days are also allowed.

As you know, much of the Florida economy relies on the tourist industry. Vacation rental owners are demanding that they be allowed to open immediately with the same “common-sense” restrictions that other lodging operators are required to follow. The lawsuit seeks an injunction against the Governor’s order as well as compensation for lost revenue. 

Although short-term rentals have their benefits, you won’t run into these kinds of problems with long-term rentals. We’d love to share our research with you on how you can build a portfolio of single-family rentals that will give you long-term passive income.

Links:

(1) ClickOrlando.com Article

(2) Florida Politics Article

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