Lawsuit filed: A legal challenge to Marco’s proposed short-term rental ordinance

A group of vacation rental owners and businesses on Marco Island filed a lawsuit Thursday to stop a referendum on the Aug. 23 ballot or to seek compensation for potential damages if the new rule passes.

Residents will be asked to vote for or against a vacation rental registration, but the plaintiffs say it will put an end to short-term rentals on the island.

“It is misleading to the voters,” said attorney David Di Pietro of Di Pietro Partners of Fort Lauderdale.

Di Pietro says there is a plethora of things wrong with the ordinance, and even Alan Gabriel, the city attorney for Marco Island, outlined in a memorandum, 19 items that could be legally challenged.

“The 19 things outlined; that as basically a road map for the lawsuit,” Di Pietro explained.

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Lawsuit claims ordinance is confusing

The 57-page lawsuit is against the city of Marco Island and Jennifer Edwards, supervisor of Elections for Collier County. The attorney says the item is illegally titled and worded on the ballot.

“The ballot question asks voters to approve a rental registration, when in fact they would be approving a complex 17-page ordinance that will devastate the local economy, create new government agencies, depress housing prices, raise their taxes, and curtail their property rights,” Di Pietro wrote in the lawsuit. “The referendum petition is a clear attempt to thwart short-term rentals in Marco Island under the guise of protecting the welfare of its residents.”

Di Pietro also says the ordinance is confusing as to what properties are affected and it violates state law.

“The legislature preempts what the city can do and does not allow a city to regulate the duration of a vacation rental,” he said. “This ordinance is regulating the duration and frequency of how you can rent your property.”

If it’s not removed from the ballot and is approved, the lawsuit asks that the proposed ordinance be declared invalid and unenforceable under applicable law. If that fails, they ask for compensation for the plaintiffs for the loss of revenue they would incur by possibly not being able to rent their homes.

A short-term vacation rental in the ordinance is defined as any home that is rented for fewer than 30 days, more than three times a year. Many of the homeowners are part- time residents that rent their homes while they are out of town.Robert Ferrarie is one of the plaintiffs. He never wanted the issue to end in a lawsuit. Instead, he asked the opposition to work with them to come up with a feasible solution. City leaders also wanted to work with the petitioners. 

“Mr. (Ed) Issler, (petitioner) came to the microphone and was asked if he was willing to negotiate on some of these points and he said no,” Council Chairman Erik Brechnitz recalled.

Ferrarie said since they refused to negotiate with the city or the homeowners, he was forced to be part of a lawsuit.

“My house is just sitting there waiting to make that money, and without that I could not have the home I have,” Ferrarie said. “It is really great. I hate to see it closed down. This lawsuit will stop them. Then we will come to the table and we will discuss our concerns and they can discuss their concerns.”

Ferrarie’s concerns are the rules he says will make it impossible to rent his home. Some of those rules include:

• A designated responsible party to be available 24/7 and respond onsite within one hour to address issues with the property.
• Have a minimum of $1 million in liability insurance coverage.
• Stricter noise restrictions for vacation rental properties compared to other properties located in the RSF (residential single family) districts. Specifically, no sound can be audible for over one minute, 25 feet from the property line between 10 p.m. and 7 a.m., and 50 feet from the property line during the day.
• No more than two people per bedroom, no more than four children under the age of 13, and no guests after 10 p.m.
• No bookings after Aug. 15, 2022, until they complete the required registration and have a city and fire inspection.

The ordinance does not specify how long it could take for the city to review and approve the application. Property owners in violation of the ordinance would be subject to monetary fines, as well suspensions for extended periods of time of at least 180 days.

Ferrarie says he has been renting his house since 2009 and has never had a complaint.

“This is our house,” he said. “We rent to families. My house is always perfect because I need to get a five-star rating. We don’t need people inspecting our house. They are just making all these rules to make it very, very hard to do this.”

Issler spearheads the political action committee that put together the petition to get the item on the ballot. He expects the ordinance to pass and the lawsuit to crumble.

“There are no legitimate grounds for a lawsuit,” Issler stressed. “The political action committee and the city of Marco Island have done everything consistent with the State of Florida election laws and the City of Marco charter.”

Issler confronted the most contentious issues.

“You are limited to 75 words,” he said about the wording on the ballot. “That’s the law. You have to summarize it.”

He said the 19 points in the city attorney’s letter are not things that are illegal.

“That was just areas of caution,” he explained. “He just took every possible thing so he couldn’t get dinged himself. They are not real points; they are just areas to be cautious.”

As for the big concern of not being able to rent after Aug. 24 while waiting for inspections and certifications, Issler says that is not true.

“We are going to deal with that,” he said. “The ordinance requires changes. Implementation – you can’t put that in the ordinance because the city charter doesn’t allow you do to that because that is the responsibility of the City Council. That is a key point.”

Ferrarie is part of the lawsuit because he fears, many homeowners won’t be able to rent and a large portion of vacation rental owners need the income to continue to own property on Marco.

“There are people where rental income was part of what they planned on when they got their mortgage,” he said. “I was able to pay off my house and upgrade it with the money. I want people like me to still have the opportunity and I want people to enjoy the island. Renters go out to dinner, they paraglide, homeowners don’t do that. Where are the businesses going to get people?”

Jim Chamberlin, owner of Marco Bike Rentals, agrees and says he is considering joining the lawsuit. He rents bikes, kayaks and golf carts and gives Jet Ski tours. His clients are the tourists that rent.

“In a perfect world lawsuits aren't necessary,” Chamberlin said. “It would be great to take the gloves off and figure this thing out, but if you can’t get a compromise, you can’t shut down these businesses. I think it is going to get passed because the people who are going to vote yes don’t know what they are voting for. If there are no short-term rentals, economically the island is shut down. If and when it goes into effect, we would literally have to move. We would have to go somewhere that we can make a living.”

The controversy all began in February when the city received an affidavit from a political action committee, Take Back Marco, in support of a Referendum Petition, which proposed adopting an ordinance to regulate the duration of vacation rentals by implementing a rental registration program for properties located within the single-family home districts.

Council members say they city had no option, but to put the item on the ballot, even if they don’t agree with it.

“We are following the charter and doing what we have to do and if we didn’t, we would be breaking the law,” said Chairman Erik Brechnitz. “It’s a soap opera.”

“Not only will it cause the city of Marco the loss of tourist dollars, it will cost the taxpayers of Marco Island in this lawsuit, so it is a double whammy,” Councilwoman Becky Irwin said. “It is going to cost a lot of money and it is not good for Marco Island to be so divided when simply the ordinances we have in place, simple measures, are much better than all the complicated things that were added into this.”

Yet the councilwoman understands why there is a lawsuit,

“It is ripe for a lawsuit,” she stated. “I am glad it is being challenged. It has so many legal deficiencies it needs to be challenged. Do I want to lose and cost the city money? No. That’s why I want people to vote no.”

Currently, there are five homeowners and businesses on the lawsuit, but Di Pietro expects more to join. If the ordinance passes, Di Pietro says the next step would be to help homeowners continue to rent their houses.

“We will file a motion for an injunction to prevent the enforcement of the ordinance and we will have a hearing on that,” he explained. “Ultimately there will be an appeal.”

 Di Pietro says he expects success.

“I think that the courts in the State of Florida are leaning toward property rights,” he said. “I think we will win this case.”