Sunday, October 5, 2008

The village's long-delayed vacation-rental regulations faced a new legal challenge even before they went into effect Wednesday.

Three Lower Matecumbe Key vacation-rental owners filed suit in Monroe County circuit court on Sept. 11, asking a judge to force city officials to process their vacation-rental applications. They also have asked Judge Luis Garcia to grant them a speedy hearing or otherwise block the village from enforcing the vacation-rental regulations until after the suit is resolved.

The planning department has refused to accept the applications, saying the homes are ineligible to receive a vacation license due to their location in a typical neighborhood of single-family homes, zoned "residential medium."

The lawsuit is the third challenge the village has faced in a five-plus-year effort to get vacation-rental regulations in place.

The original vacation-rental ordinance, which the Village Council passed in 2003, generated objections from the Florida Department of Community Affairs and a challenge by a local citizens group that considered it too permissive. Three years of negotiation yielded the present rules.

The regulations require all homeowners who want to rent their properties for periods of less than 28 days to be licensed annually. They also limit the total number of vacation-rental units within Islamorada to 331 and forbid homeowners in typical single-family neighborhoods from obtaining a license. A grandfather clause allows exceptions for homes in such neighborhoods that have been rented legally for short term-use since December 2001 -- when Islamorada's comprehensive land-use plan took effect -- but only if the owner has thorough documentation. The annual licensing fee is $1,000.

Passed in February 2006, the regulations were challenged in court by a group of home and condominium owners, who argued that they infringe upon property rights and would be bad for the local tourist-based economy.

A Tallahassee appeals court sided with the village this February.

The litigants in the current case, Joseph and Therese Pike, Robert and Melinda Pettinga and a business called 311 Tollgate Drive, have rented their homes on a short-term basis since at least 2005, according to the suit.

In letters to each of the three applicants, Planning Director Ed Koconis concluded that they cannot be excepted from the law's ban on vacation homes in the residential-medium zoning district because they have not been renting the homes since the December 2001 threshold. The homes would have to be considered "new" vacation rentals under the ordinance, and are not allowed due to their location, Koconis found.

The litigants, however, argue that the ordinance fails to distinguish between properties that are truly seeking to become new vacation rentals, and those that have been operating as vacation properties for years, but not since late 2001.

"Plaintiffs are not 'new vacation rental unit owners' but are owners of existing vacation rental units with a documented history of all appropriate licensure and tax payment, who operated their units lawfully prior to the adoption and/or implementation of the ordinance," attorney Richard Bennett alleges in the suit.

Koconis said the village merely is enforcing its laws.

"We believe we are implementing the ordinance as it was adopted," he said.

The lawsuit came less than a week before the Sept. 17 conclusion of the first vacation license application window, a time period to take place annually.

During the two-month process, Islamorada accepted between 150 and 160 applications, Koconis said, less than half the 331 license limit. The vast majority of people who applied for a license will receive one.

"Not a lot of people came in. I don't know why," he said.

Patti Stanley, owner of Island Villa Rentals and a longtime opponent of the vacation-rental ordinance, said the explanation is obvious. Property owners seeking to qualify their homes as existing rentals had to present the Monroe County Tourist Development Council tax receipts dating back to 2001, as well as evidence of state and county licensure for each year -- a high standard.

"I think that as time goes on, there will be people continuing to operate without the license," Stanley said. "For the short-term, people will be cautious. The criteria was too unreasonable."

Village Manager Ken Fields acknowledged the process is "onerous." He said the village is researching whether the ordinance would allow the town to continue accepting applications for the 2008-09 fiscal year in the coming months.

The village also might consider easing record requirements for coming years -- a step that would mandate a formal change of the vacation-rental law, he said.

rsilk@keysnews.com