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HomeMy WebLinkAboutLeibowitz; 290 W. San Carlos Packet ADMINISTRATIVE APPEALS BOARD STAFF REPORT DATE: September 27, 2023 SUBJECT: APPEAL OF THE ADMINISTRATIVE DECISION THAT ITAI LEIBOWITZ IS INELIGIBLE FOR A VACATION RENTAL CERTIFICATE TO OPERATE A VACATION RENTAL FOR A PROPERTY LOCATED AT 290 W. SAN CARLOS RD., PALM SPRINGS, CALIFORNIA PURSUANT TO PALM SPRINGS MUNICIPAL CODE 5.25.040(B) BY: DEPARTMENT OF SPECIAL PROGRAM COMPLIANCE SUMMARY Itai Leibowitz has requested an appeal of the administrative decision to deny a Vacation Rental Registration Certificate for the property located at 290 W. San Carlos Rd., pursuant to Palm Springs Municipal Code (PSMC) 5.25.040(b) and the ineligibility related to a financial interest at a registered Vacation Rental property located at 250 W. San Carlos Rd., Palm Springs, California. RECOMMENDATION: 1) Open the Appeal Hearing and accept public testimony. 2) Adopt Resolution No. ______, A RESOLUTION OF THE ADMINISTRATIVE APPEALS BOARD OF THE CITY OF PALM SPRINGS, CALIFORNIA, ON THE APPEAL OF ITAI LEIBOWITZ FOR THE PROPERTY LOCATED AT 290 W. SAN CARLOS RD., PALM SPRINGS, CALIFORNIA REGARDING THE DENIAL OF A VACATION RENTAL REGISTRATION CERTIFICATE. THIS PORTION OF PAGE BLANK Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs Background On February 9, 2022, Itai Leibowitz was issued Vacation Rental Registration Certificate #4928 for the property located at 290 W San Carlos Rd., Palm Springs under the 290 W San Carlos LLC. On July 7, 2022, a Vacation Rental Registration Certificate #4942 was issued to the spouse of Itai Leibowitz, Dan Aharon for the property located at 250 W San Carlos Rd., Palm Springs under the Sunny Luxury Villas LLC. At the time Registration Certificate #4942 was issued, Ordinance 1918 was in effect. The language under PSMC 5.25.040(b) states: “…A natural person, limited liability company, or personal or family trust shall not maintain any financial interest in more than one Vacation Rental. For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental. An owner shall be issued, and can only maintain, one Vacation Rental Registration Certificate at any time”. The initial conversation between Department of Special Program Compliance staff and Dan Aharon, henceforth referred to as “the Applicant,” in March, 2022 related to the application for a Vacation Rental Registration Certificate for the property located at 250 W. San Carlos Rd., Palm Springs resulted in advising the Applicant they could not apply because the Applicant’s spouse, Itai Leibowitz, who was on the Deed of Trust for the property demonstrated a beneficial interest. Itai Leibowitz additionally already had a Vacation Rental Certificate for the property located at 290 W. San Carlos, Palm Springs. The Applicant requested that the application be reviewed further for acceptance. The conversation continued into April of 2022 when the Applicant followed up with staff and clarified that:  Dan Aharon had no ownership or relationship with the LLC that owns 290 W San Carlos Rd (290 W San Carlos LLC)  Any income that is generated from the property located at 290 W San Carlos Rd is transferred to bank accounts in the LLC’s name, or to Itai’s bank account and Dan had no access to either of those.  Itai Leibowitz had no ownership in the property located at 250 W. San Carlos Rd or the LLC that owns it (Sunny Luxury Villas LLC) and would have no access to the income generated from it. Attachment 4 At that time, it was the Applicant’s understanding that the information provided demonstrated compliance with the requirements for a short-term rental from the points listed below:  No legal ownership of 290 W San Carlos Rd or 290 W San Carlos LLC.  No financial interest since any income associated with 290 W San Carlos LLC goes to accounts that Dan Aharon had no access to. Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs  No arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental at 290 W San Carlos Rd. The conversation continued further into May 2022 with staff relating to California Community Property laws. The Applicant had consulted with legal counsel and signed a transmutation agreement Attachment 5 which clarified each house (290 W San Carlos and 250 W San Carlos) is separate property, and Dan Aharon and Itai Leibowitz have no beneficial interest in each other's property. In addition, the Applicant explained to the counsel that beneficial interest required having a right to income from a trust or business. Since there was no right to that income (it goes to an LLC and bank account that the other has no access), there was no beneficial interest in each other's property.1 2 Staff relayed the information provided by the Applicant to the City Attorney’s office for review in June 2022. From the City Attorney’s office, it was found that:  Dan Aharon and Itai Leibowitz had gone to such lengths to dis-associate their interests by way of separate LLC’s which, at the time, held the properties separately and entered into a transmutation agreement which established the properties as their sole and separate properties.  A beneficial interest in land is reasonably interpreted to be a current economic interest. A future interest in land based on the death of a spouse is not a beneficial interest. Not only is the interest contingent upon a future act (the death of spouse), there is no certainty that the beneficial interest will ever occur (the planning documents can be modified prior to the death of the spouse).  The fact that two individuals are married was not determinative based on the reading of the regulations. It comes down to whether an individual maintains a “financial interest” in more than one rental property. Spouses may have prenuptial or post nuptial agreements in place. They might use money that is not considered community property to purchase the rental property (i.e., inheritance or earnings prior to marriage). They may have married in a state that doesn’t recognize community property at all. 1 California is a community property state. Generally, property acquired during the marriage by either spouse is presumed to be owned by each spouse equally. “No Access” doesn’t necessarily mean that it’s not a marital asset. Additionally, following the deed history will reveal that at least one property was purchased with comingled funds. Even if the revenue from each property is now separate (pursuant to a transmutation agreement and post close vesting changes) any commingling of rental revenue (both past and future) should fall under the category of “Community Property” per California’s Community Property ordinances. California Family Code Section 760 2 California Family Code Section 770 Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs After receiving feedback from the City Attorney, City staff issued the Vacation Rental Registration Certificate #4942 for the property located at 250 W San Carlos Rd., Palm Springs. At the October 17, 2022, City Council meeting, the Council directed the City staff and City Attorney to bring back an ordinance for consideration that addressed certain issues, one of them being further defining the “incidental” use of residences. On November 10, 2022, staff presented a staff report for issues raised at the October 17, 2022, City Council Meeting. Attachment 6 The staff report dated November 10, 2022, presented “incidental uses of residences”. ”One of the primary issues involved in the City’s regulation of vacation rentals is the concept that vacation rentals of residential properties is, and should be, considered an incidental use of that residence. Specifically, the City’s current vacation rental ordinance provides that a person cannot maintain any financial interest in more than one vacation rental property. For this purpose, the City’s current ordinance provides that a financial interest includes both “legal and beneficial ownership, as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental.” The City has received at least one request, by a married couple, to allow two (2) residential properties to be registered as vacation rentals. In the City staff’s opinion, the ownership and operation of two (2) residential properties by a married couple (or a couple in a domestic partnership) is inconsistent with the concept of “incidental” use of that residence. As such, the proposed ordinance clarifies the rule prohibiting any financial interest in more than one (1) vacation rental, by declaring that a person will be deemed to have a financial interest in a vacation rental that is owned by his or her spouse or registered domestic partner, regardless of any pre- or post- nuptial agreements to the contrary”. At the City Council meeting on November 28, 2022, City Council discussed scenarios relating to incidental uses. Specifically, Exhibit 1 offers video footage of the Council conversation starting at the time of 58:43 – November 28, 2022 Council Meeting. Specifically, at 1:08, Mayor Middleton discusses “disfavor, anyone coming forward trying to evade rules by legally separating or doing something else with marital status that was solely directed towards obtaining a second permit”. The City Council adopted Ordinance 2075 on November 28, 2022. Ordinance 2075 amended and restated the City's adopted Vacation Rental Ordinance. Specifically, language was amended and added under PSMC 5.25.040(b) to read: “A natural person, partnership, limited liability partnership, or limited liability company that does not qualify as a “Business Entity”, or personal or family trust shall not maintain any financial interest in more than one Vacation Rental. For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental. For purposes of this section, Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs a person shall be deemed to have a financial interest in any Vacation Rental that is owned by his or her spouse or registered domestic partner, regardless of the terms of any contractual arrangement, such as any transmutation (i.e., pre- or post- nuptial) agreement. An Owner shall only be issued, and can only maintain, one Vacation Rental Registration Certificate at any time”. STAFF ANALYSIS: The Vacation Rental Registration Certificate for the property located at 290 W San Carlos Rd., Palm Springs expired on January 31, 2023. Additionally, the Vacation Rental Registration Certificate for the property located at 250 W San Carlos Rd., Palm Springs expired on June 30, 2023. With the Ordinance 2075 adoption on November 28, 2022, staff finds that the Vacation Rental Registration Certificate for the property 290 W San Carlos Rd., Palm Springs, which is due first for renewal, ineligible to be renewed due to the following conflicts with Ordnance 2075: A natural person, partnership, limited liability partnership, or limited liability company that does not qualify as a “Business Entity”, or personal or family trust shall not maintain any financial interest in more than one Vacation Rental. For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental. For purposes of this section, a person shall be deemed to have a financial interest in any Vacation Rental that is owned by his or her spouse or registered domestic partner, regardless of the terms of any contractual arrangement, such as any transmutation (i.e., pre- or post- nuptial) agreement. An Owner shall only be issued, and can only maintain, one Vacation Rental Registration Certificate at any time.” While the Vacation Rental Registration Certificate for 290 W San Carlos Rd. was issued without any conflict to the Ordinance on February 9, 2022, and a Vacation Rental Registration Certificate was issued to 250 W San Carlos Rd., after being evaluated by the City Attorney, staff now finds after reviewing the newly adopted Ordinance that there is a conflict and is unable to renew the Vacation Rental Certificate for 290 W San Carlos Rd., Palm Springs. Additionally, it is found that: •11/2/2021 Quit Claim Deed states that Dan Aharon, a married man, spouse of the grantee herein hereby remise(s), release(s) and forever quitclaims(s) to Itai Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs Leibowitz, a married man as his sole and separate property. The property located at 290 W. San Carlos Rd., Palm Springs. Attachment 7 •9/25/2021 Grant Deed states that Sunny Villas LLC grants Dan Aharon married to Itai Leibowitz, a married couple community property with rights of survivorship the real property located at 250 W San Carlos. Attachment 8 •9/25/2021 Deed of Trust states the Trustor as Dan Aharon and Itai Leibowitz, a married couple as community Property with right of survivorship for the property 250 W. San Carlos Rd., Palm Springs Attachment 9 •2/7/2022 Grant Deed states Dan Aharon and Itai Leibowitz granted the real property located at 250 W San Carlos to Sunny Luxury Villas LLC Attachment 10 The review of the property specific information listed above relating to both 290 and 250 W San Carlos show that there is a financial and beneficial interest in more than one Vacation Rental by Itai Lebowitz and regardless of the transmutation agreement previously provided, there is a conflict with PSMC 5.25.040(b), and staff has denied the Vacation Rental Registration Certificate for the property located at 290 W San Carlos Rd., Palm Springs. Attachment 11. Appellant has requested that their permit be “grandfathered”; however, Ordinance 2075 does not provide for such request. It is important to point out that a use is “grandfathered” if it was legal at the time it was established. It should not be grandfathered regardless of extensive measures taken to secure a permit. The following Palm Springs Municipal Codes sections are applicable to this matter. The Palm Springs Municipal Code §5.25.030 Definitions, reads as follows: "Vacation Rental" means a single-family dwelling, or any portion thereof, utilized for occupancy for dwelling, lodging, or sleeping purposes without the Owner being present for a period of twenty-eight (28) consecutive days or less,…” Palm Springs Municipal Code §5.25.040(a) reads as follows: The operation of a Vacation Rental or a Homeshare Interest without a Vacation Rental Registration Certificate is prohibited. Palm Springs Municipal Code §5.25.040(b) reads as follows: A Vacation Rental Registration Certificate shall not be issued to any Business Entity. A natural person, partnership, limited liability partnership, or limited liability company that does not qualify as a “Business Entity”, or personal or family trust shall not maintain any Administrative Appeals Board Staff Report September 27, 2023 Vacation Rental Appeal – 290 W. San Carlos Rd., Palm Springs financial interest in more than one Vacation Rental. For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental. For purposes of this section, a person shall be deemed to have a financial interest in any Vacation Rental that is owned by his or her spouse or registered domestic partner, regardless of the terms of any contractual arrangement, such as any transmutation (i.e., pre- or post- nuptial) agreement. An Owner shall only be issued, and can only maintain, one Vacation Rental Registration Certificate at any time. Palm Springs Municipal Code §5.25.040(b) reads as follows: The issuance and or renewal of a Registration Certificate shall be deemed evidence that the holder of such Registration Certificate has registered a vacation rental property with the City and that the holder acknowledges the holder’s obligation to comply with all provisions of this Chapter and the Code. The issuance of a Registration Certificate shall not be construed as bestowing or granting any vested right or entitlement. Patrick Clifford Assistant Director Department of Special Program Compliance Attachments: Resolution no. _____ 1 Notice of Appeal Hearing 2 Administrative Appeal Letter 3 LLC Documents 4 Transmutation agreement 5 November 10, 2022 City Council Staff Report 6 11/21/22 290 W. San Carlos Quit Claim Deed 7 9/25/21 250 W. San Carlos Quit Claim Deed 8 9/25/21 250 W. San Carlos Deed of Trust 9 2/7/22 250 W. San Carlos Grant Deed 10 Notice of Denial 11                     ATTACHMENT 1  RESOLUTION NO. ____ RESOLUTION OF THE ADMINISTRATIVE APPEALS BOARD OF THE CITY OF PALM SPRINGS, CALIFORNIA, ON THE APPEAL OF ITAI LEIBOWITZ FOR THE PROPERTY LOCATED AT 290 W. SAN CARLOS RD., PALM SPRINGS, CALIFORNIA REGARDING THE DENIAL OF A VACATION RENTAL REGISTRATION CERTIFICATE. Jurisdiction: This administrative hearing is conducted in accordance with Palm Springs Municipal Code 2.50 which confers jurisdiction upon the Administrative Appeals Board. WHEREAS On February 9, 2022, Itai Leibowitz was issued Vacation Rental Registration Certificate #4928 for the property located at 290 W San Carlos Rd., Palm Springs under the 290 W San Carlos LLC; and WHEREAS, The City Council adopted Ordinance 2075 on November 28, 2022; and WHEREAS, Palm Springs Municipal Code Section 5.25.040(b) reads “A natural person, partnership, limited liability partnership, or limited liability company that does not qualify as a “Business Entity”, or personal or family trust shall not maintain any financial interest in more than one Vacation Rental”; and WHEREAS, Palm Springs Municipal Code Section 5.25.040(b) reads “For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental”; and WHEREAS, Palm Springs Municipal Code Section 5.25.040(b) reads “For purposes of this section, a person shall be deemed to have a financial interest in any Vacation Rental that is owned by his or her spouse or registered domestic partner, regardless of the terms of any contractual arrangement, such as any transmutation (i.e., pre- or post- nuptial) agreement”; and WHEREAS, Palm Springs Municipal Code Section 5.25.040(b) reads “An Owner shall only be issued, and can only maintain, one Vacation Rental Registration Certificate at any time”; and WHEREAS, Vacation Rental Registration Certificate #4928 for the property located at 290 W San Carlos Rd., Palm Springs under the 290 W San Carlos LLC Expired January 31, 2023; and WHEREAS, The Department of Special Program mailed a document dated July 17, 2023 titled “Notice of Denial of Permit Renewal of Vacation Rental Registration Certificate City ID NO. 4928; Resolution No. Page 2 WHEREAS, Itai Leibowitz, on behalf of 290 W. San Carlos LLC, filed an administrative appeal of the denial for the renewal of Vacation Rental Registration Certificate #4928 for the property located at 290 W. San Carlos Rd., Palm Springs with the City Clerk; and WHEREAS, the Administrative Appeals Board opened and conducted a duly noticed Administrative Appeal Hearing on September 27, 2023; and WHEREAS, the Administrative Appeals Board was presented evidence that Itai Leibowitz is in violation of Section 5.25.040(b) of the Palm Springs Municipal Code by maintaining financial interests in more than one Vacation Rental; and WHEREAS, the Administrative Appeals Board has carefully reviewed and considered all the evidence presented in connection with said appeal on September 27, 2023; and THE ADMINISTRATIVE APPEALS BOARD HEREBY FINDS, after due consideration given to the relevancy, weight and credibility of testimony and evidence, and based upon a preponderance of the evidence in accordance with the Board’s procedures, as follows: SECTION 1. The Appellant is in violation of Palm Springs Municipal Code 5.25.040(b). The Administrative Appeals Board upholds the administrative decision that Itai Leibowitz is ineligible for a Vacation Rental Certificate to operate a vacation rental for a property located at 290 W. San Carlos Rd., Palm Springs, California The Appellant is in violation of Palm Springs Municipal Code 5.25.040(b). The Administrative Appeals Board overturns the administrative decision that Itai Leibowitz is ineligible for a Vacation Rental Certificate to operate a vacation rental for a property located at 290 W. San Carlos Rd., Palm Springs, California Resolution No. Page 3 SECTION 2. The Administrative Appeals Board directs the City Clerk to deliver a copy of this Resolution to each party and to file a disposition report with the Palm Springs City Council. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS ADMINISTRATIVE APPEALS BOARD THIS DAY OF 2023. Wayne Sinclair Chair ATTEST: Brenda Pree, MMC, CERA City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, BRENDA PREE, City Clerk of the City of Palm Springs, do hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a meeting of the Administrative Appeals Board of the City of Palm Springs on the day of , by the following vote: AYES: NOES: ABSENT: ABSTAIN: RECUSE: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this day of . Brenda Pree, MMC, CERA City Clerk                     ATTACHMENT 2                      ATTACHMENT 3         City of Palm Springs, CA             FINANCE DEPARTMENT               PO Box 2743       Palm Springs, CA 92263-2743            +1 (760) 323-8299 08/01/2023 03:05PM Shahriar  001583-0004 MISCELLANEOUS   OTHER CHARGE CURRENT   SVC (OTHCHG)   2024    Item: OTHCHG    1 @ 195.00   Balance unpaid: -195.00     OTHER CHARGE CURRENT     SVC (OTHCHG)                 195.00                           --------------                                   195.00  Subtotal                         195.00  Total                            195.00  TP CREDIT CARD                   195.00   ************1423 Ref=f23d459a-6680-4ace-8788-260c30686947 Auth=080418                          --------------  Change due                         0.00  Paid by: CARDHOLDER/VISA        Thank you for your payment              CUSTOMER COPY                     ATTACHMENT 4  LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF SUNNY LUXURY VILLAS, LLC A Member Managed Limited Liability Company This Agreement is entered into on Jan 5th, 2021, by and between SUNNY LUXURY VILLAS, LLC, (the "Company") and Dan Aharon, of (Address hereinafter known as the "Member(s)" The Member(s) desire to set forth the terms herein of the Company's operation and the relationship between Member(s). NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Member(s) and the Company agree as follows: 1. Formation The Company was formed in California on Jan 4th, 2021 pursuant to the statutes governing limited liability companies in said State (the "Statutes"). 2. Name and Principal Place of Business The name of the Company shall be Sunny Luxury Villas, LLC with a principal place of business at 4 or as otherwise selected by the Members. 3. Purpose The Company may conduct any and all lawful business, activity or functions appropriate in carrying out the Company's objectives as determined by the Members. 4. Registered Office and Resident Agent The location and name of the registered agent will be as stated in the Company's formation documents or any amendment thereof. 5. Term The term of the Company shall be perpetual, commencing on the filing of the Articles of Organization of the Company, and continuing until terminated under the provisions set forth herein. 6. Member Capital Contributions Each Member has contributed the following capital amounts to the Company as set forth below and are not obligated to make any additional capital contributions: Dan Aharon $2,500 California Secretary of State Electronic Filing Secretary of State State of California ) LLC Registration -Articles of Organization Entity Name: 290 w San Carlos LLC Entity (File) Number: 202126610013 File Date: 09/20/2021 Entity Type: Domestic LLC Jurisdiction: California Detailed Filing Information 1. Entity Name: 2. BusinessAddresses: a. Initial Street Address of Designated Office in California: b. Initial Mailing Address: 3. Agent for Service of Process: 4. Management Structure: 5. Purpose Statement: Electronic Signature: 290 W San Carlos LLC 4535 20th St San Francisco, California 94114 United States 4535 20th St San Francisco, California 94114 United States REGISTERED AGENTS INC (C3365816) All LLC Mernber(s) The purpose of the limited liability company is to engage in any lawful act or activityforwhich a limited liability company may be organized under the California Revised Uniform Limited Liability Company Act. The organizer affirms the information conta.in~d herein is true and correct. Organizer: ltai Leibowitz                     ATTACHMENT 5  Marital Property Transmutation Agreement 1 MARITAL PROPERTY TRANSMUTATION AGREEMENT The parties to this Marital Property Transmutation Agreement (“Agreement”) are DAN AHARON (“Aharon”) and ITAI LEIBOWITZ (“Leibowitz”), sometimes individually referred to as “Party” and collectively referred to herein as the “Parties”. ARTICLE 1: INTRODUCTORY PROVISIONS Section 1.1. Relationship of Parties. The Parties are married to each other. Section 1.2. Purpose of Agreement. The Parties are entering into this Agreement in order to specify the character of their property interests pursuant to the applicable provisions of the California Family Code. This Agreement is not made in contemplation of a separation or marital dissolution. Section 1.3. Scope and Force of Agreement. The Parties intend that the characterizations of their property interests made in this Agreement take precedence over the forms of title in which those interests are held. Section 1.4. Disclosures. The Parties have each made full and complete disclosures to one another of the nature and extend of the property he owns separately or jointly with the other and all other facts pertinent to this Agreement. ARTICLE 2: CHARACTERIZATION OF PROPERTY INTERESTS Section 2.1. All Currently Held Property Is Community Property; Except for Specified Property. The Parties agree that all property owned by either Party, or by both, as of the date of this Agreement and all property acquired by either party, or by both, after the date of this Agreement, is the community property of both Parties, except for those properties specifically identified in Sections 2.2 and 2.3 below. The Parties are transmuting community property, as provided below. Section 2.2. Transmutation of Community Property to Aharon’s as His Separate Property. The Parties hereby expressly change the character of the property listed on Exhibit A and shall further relinquish any beneficial interest in that property and agree to this change from their community property to the sole and separate property of Aharon. Leibowitz expressly agrees that the property described in Exhibit A, including any future rents, issues, profits, and proceeds of that property is hereby transmuted from the community property of both Parties to Aharon as his sole and separate property. Exhibit A is attached to and made part of this Agreement. Section 2.3. Transmutation of Community Property to Leibowitz’s as His Separate Property. The Parties hereby expressly change the character of the property listed on Exhibit B and shall further relinquish any beneficial interest in that property and agree to this change from their community property to the sole and separate property of Leibowitz. Aharon expressly agrees that the property described in Exhibit B, including any future rents, issues, profits, and proceeds of that property is hereby Marital Property Transmutation Agreement 2 transmuted from the community property of both Parties to Leibowitz as his sole and separate property. Exhibit B is attached to and made part of this Agreement. Section 2.4 Indebtedness Paid From Separate Funds Deemed Gift to Community. The Parties agree that any payments made from the separate property of either Party for taxes, insurance, maintenance, interest, and principal on any indebtedness with respect to community property shall be deemed a gift to the community and shall not be subject to reimbursement. Section 2.5 Inherited Property. Any property inherited by either Party shall remain his sole and separate property unless specifically transmuted into community property by a separate written agreement specifically referring to said property. Furthermore, any damages to which California Family Code Section 781(c) applies shall remain the separate property of the Party entitled thereto. ARTICLE 3: ADDITIONAL PROVISIONS Section 3.1. Severability. If any portion of this Agreement is found to be invalid, the remainder of this agreement shall remain in force and shall in no way be impaired or affected by the invalid portion. Section 3.2. Amendment. This Agreement can only be modified or revoked by a written instrument, executed by both parties, that expressly refers to this Agreement. Section 3.3. Agreement Binding on Successors. This Agreement is to be binding on the Parties, their successors, heirs, assigns, executors, and administrators. Section 3.4. Execution of Other Instruments. The Parties covenant and agree that on the request of the other Party, or his successors or assigns, he shall execute, deliver, and properly acknowledge any deeds or other documents necessary to give effect to this Agreement. Section 3.5. Captions. The captions appearing in this Agreement are for convenience of reference only, and shall be disregarded in determining the meaning and effect of the provisions of this instrument. Section 3.6. California Law to Apply. All questions concerning the validity and interpretation of this Agreement shall be governed by the laws of the State of California, regardless of the domicile of either party. Executed on May ___, 2022, at ______________________, California. Dan Aharon Itai Leibowitz 13th Palm Springs Marital Property Transmutation Agreement 3 EXHIBIT A Community Property Being Transmuted to Dan Aharon’s Separate Property 1. Single family residence located at 250 W. San Carlos Road, Palm Springs, California, 92262, together with all the fixtures, furniture, and furnishing, including any future rents, issues, profits, and proceeds legally described as: LOT 35 OF VISTA DEL MONTE, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18, PAGE 77 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ASSESSOR PARCEL NO. 504-104-006 2. All membership interest in Sunny Luxury Villas LLC, a California Limited Liability Company, owned by the Parties on the date of execution of this Agreement. Marital Property Transmutation Agreement 4 EXHIBIT B Community Property Being Transmuted to Itai Leibowitz’s Separate Property 1. Single family residence located at 290 W. San Carlos Road, Palm Springs, California, 92262, together with all the fixtures, furniture, and furnishing, including any future rents, issues, profits, and proceeds legally described as: LOT 36 OF VISTA DEL MONTE, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 18 PAGE 77, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ASSESSOR PARCEL NO. 504-10-4007 2. All membership interest in 290 W San Carlos LLC, a California Limited Liability Company, owned by the Parties on the date of execution of this Agreement. See attached Certificate Notarized by Julius Earl Jones State of Florida County of ___________________ FLORIDA SHORT-FORM INDIVIDUAL ACKNOWLEDGMENTF.S. 695.25 ©2016 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5181 Description of Attached Document Title or Type of Document: ____________________________________________________________________________ Document Date: _______________________________________________ Number of Pages: ____________ Signer(s) Other Than Named Above: ___________________________________________________________________ Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. OPTIONAL Place Notary Seal Stamp Above The foregoing instrument was acknowledged before me this ___________________________ day of ______________________________, ____________, by ___________________________________________, who is personally known to me or who has produced ________________________________ ______________________________________________ as identification. ______________________________________________ _____________________________________________ Notary Public — State of Florida Type of Identification Name of Notary Typed, Printed or Stamped Month Year Name of Person Acknowledging Signature of Notary Public Date Escambia Notarized using multifactor authentication and audio/video recording Julius Earl Jones Sign _______________ 13th May 2022 Itai Leibowitz and Dan Aharon 5 NA 05/13/2022 Marital Property Transmutation Agreement  California Driver license                     ATTACHMENT 6  CITY COUNCIL STAFF REPORT DATE: NOVEMBER 10, 2022 BUSINESS & LEGISLATIVE SUBJECT: DISCUSSION AND INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING AND RESTATING CHAPTER 5.25 REGARDING VACATION RENTALS; AND POTENTIAL ACTION REGARDING THE EXISTING MORATORIUM ON THE PROCESSING AND ISSUANCE OF VACATION RENTAL CERTIFICATES FROM: Teresa Gallavan, Interim City Manager BY: Department of Special Program Compliance SUMMARY: At the March 29, September 29, and October 17, 2022 City Council meetings, the City Council heard information and considered whether additional regulation of vacation rental uses within the City would be appropriate. At the October 17, 2022 City Council meeting, the City Council adopted an urgency ordinance, establishing a temporary pause on the processing and issuance of Vacation Rental (VR) permits within the City, pending a study of potential new or additional regulations. At that time, the Council also directed City staff and the City Attorney to bring back an ordinance establishing certain vacation rental regulations. This agenda item provides the City Council with the opportunity to consider an Ordinance modifying the current Vacation Rental regulations, as well as potentially providing further direction to City staff and the City Attorney regarding further regulations. This agenda item also provides the City Council with an opportunity to modify the moratorium adopted on October 17, 2022, should the City Council wish to do so. RECOMMENDATION: 1. Waive the reading of text in its entirety, read by title only, and introduce for first reading Ordinance No._____, “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING AND RESTATING CHAPTER 5.25 REGARDING VACATION RENTALS”; and 2. Provide direction regarding further Vacation Rental regulations. Item 3A - Page 1 City Council Staff Report November 10, 2022 -- Page 2 Vacation Rental Ordinance BACKGROUND: At the October 17, 2022 City Council meeting, the Council directed the City staff and City Attorney to bring back an ordinance for consideration that addressed the following issues: • Neighborhood-based caps on vacation rentals; • Requirements for owner-occupation of vacation rental properties; • An additional category of VR permits for those owners who wish to rent fewer than thirty-six times per year (aka “Junior Permits”); • Grandfathering (or Grandparenting) in of some of these new regulations; • Interplay of Vacation Rentals and Event Houses; • Clarification of consequences of failure to pay transient occupancy tax (TOT); • Further defining the “incidental” use of residences; and • Regular review of VR ordinance regulations. At the October 17 City Council meeting, the Council also paused the processing and issuance of VR permits, pending further direction regarding vacation rental regulations. STAFF ANALYSIS: The accompanying ordinance addresses the issues raised by the City Council on October 17, 2022. Each issue is addressed, in turn, below. Neighborhood-Based Caps The draft ordinance establishes a cap on the number of Vacation Rental Registration Certificates that can be issued, based on the percentage of those certificates that are issued in a particular Neighborhood in relation to the number of dwelling units within that Neighborhood. Under the proposed ordinance, a “Neighborhood” is one of the City’s officially recognized Neighborhoods. For those areas within the City that are not currently located within an officially recognized neighborhood, the proposed ordinance permits the City Council to determine, by resolution, which areas that the City will recognize as a “neighborhood”, for purposes of vacation rental regulations only. The proposed ordinance proposes a cap of twenty percent (20%) of the residential dwelling units located within a particular Neighborhood, which can be registered as a vacation rental. This cap, as proposed, excludes residential apartments and condominiums. However, any dwelling unit (whether single-family residence or residential condominium) that is still regulated by the original HOA developer would be included, for purposes of calculating the percentage. Item 3A - Page 2 City Council Staff Report November 10, 2022 -- Page 3 Vacation Rental Ordinance As proposed, the ordinance would establish a Neighborhood cap of twenty percent (20%) of residential dwelling units. Of course, this percentage could be modified in this draft ordinance by the City Council, in the Council’s discretion. The proposed ordinance would also allow this percentage to be modified, from time to time, by City Council resolution. The proposed Neighborhood-based cap would not affect any existing certificates that have been issued by the City, even in Neighborhoods that exceed the percentage cap. However, the City would not, under the proposed ordinance, issue any additional VR certificates within that Neighborhood, unless and until the number of permits is lower than the percentage cap. Thus, for those Neighborhoods where the percentage exceeds the cap, the City would likely need to establish some method of tracking additional applications, and determine an equitable method for issuing certificates, if and when the number of certificates falls below the percentage cap. For instance, the City could then issue such certificates on a first come-first serve basis. Alternatively, the City Council could establish a lottery type system. Owner-Occupation of Vacation Rental Properties The proposed ordinance requires New Permittees to reside at the property at least ninety (90) days per calendar year. The ordinance requires that a New Permittee applicant for a vacation rental permit certify, under penalty of perjury, that the owner intends to occupy the property for that period. And, the ordinance requires such owner to certify, again under penalty of perjury, that the owner has actually occupied the property for that past ninety (90) day period, as part of the owner’s annual re-authorization of the vacation rental certificate. Although the proposed ordinance proposes a ninety (90) day occupancy requirement, this amount could, in the Council’s discretion, be adjusted to another number that the City Council reasonably determines qualifies as the “primary” use of the residence. In reviewing the direction provided by Council at the October 17, 2022 Council meeting, staff has identified concerns regarding enforcement of some of the proposed additional regulations; the most challenging being the requirement for vacation rental permit holders to reside in the home for 90 days per calendar year. The ability to ascertain evidence to support the residency affidavit will be difficult for staff to ascertain and validate. This proposed regulation has caused the most concern with Special Programs staff, who believe that it will be difficult to enforce. Presently, contract summary submission is on an honor system. The numbers are not reliable and basing two permits on the number of contracts submitted is problematic for enforcement. For example, a sampling of 183 properties was conducted to determine the reliability of contract summary submissions. The results of which were that 33% of properties did not enter contract summaries yet filed TOT returns evidencing rentals. Item 3A - Page 3 City Council Staff Report November 10, 2022 -- Page 4 Vacation Rental Ordinance Junior Permits At the October 17 City Council meeting, the City Council directed staff and the City Attorney to come up with a separate category of vacation rental permits for those property owners who do not wish to rent their residences as many times as is currently authorized in Chapter 5.25. As such, a “junior” permit category is proposed in the accompanying ordinance. A “junior” VR permit is one that authorizes fewer annual Contracts and for which a lower registration fee is to be paid. The proposed ordinance proposes a cap of six (6) Contract stays per calendar year for such “junior” VR permits. The proposed ordinance also provides that, if at the time of the annual permit renewal, an owner has not registered seven (7) or more Contract stays with the City, the vacation rental certificate for that property will automatically be renewed as a Junior Permit. Thus, the ordinance proposes a sort of “use it, or lose it” system. Although the proposed ordinance establishes a cap of six (6) Contract stays per calendar year, the City Council could, in its discretion, establish a different numerical cap. The proposed ordinance also proposes to allow for a reduced registration fee for such “junior” VR certificates, based on the reduced regulatory costs associated with less intense rentals of these properties. The exact amount of such registration fees would be brought back to Council for adoption by resolution. Grandfathering (Grandparenting) The proposed ordinance allows for existing permittees to operate under the current ordinance, for a defined period of time. The proposed ordinance defines an “existing permittee” as any property for which a VR permit has been issued, or for which a complete application has been filed with the City, on or before October 17, 2022. A “new” permittee, by contrast, is one for which a complete application for a Vacation Rental Registration Certificate was filed with the City after October 17, 2022. As with other numerical regulations contained in the proposed ordinance, these dates can be adjusted by the City Council in its reasonable discretion. The proposed ordinance caps existing permittees at thirty-two (32) plus four (4) (in the Third Quarter) for five (5) years, i.e., until December 31, 2027. Commencing January 1, 2028, existing permittees will be limited to twenty (20) plus four (4) (in the Third Quarter) per calendar year. As with other numerical regulations contained in the proposed ordinance, these dates and numbers can be adjusted by the City Council in its reasonable discretion. Item 3A - Page 4 City Council Staff Report November 10, 2022 -- Page 5 Vacation Rental Ordinance For the occupancy requirement, the proposed ordinance requires New Permittees to occupy their residential property for at least ninety (90) days per calendar year (or pro- rata portion of the calendar year). These ninety (90) days need not be consecutive. However, after five (5) years, i.e., after January 1, 2028, all vacation rental owners will be required to occupy the property for ninety (90) days. As with other numerical regulations contained in the proposed ordinance, these dates and numbers can be adjusted by the City Council in its reasonable discretion. Vacation Rentals and Event Houses The proposed ordinance provides that Vacation Rentals (including any Junior Vacation Rentals) cannot be used as an Event House. This represents an effort to further reduce the impact to neighbors, by residences that might otherwise be used both for vacation rentals as well as special events. Failure to Pay Transient Occupancy Tax (TOT) Under the proposed ordinance, if any person who operates a Vacation Rental in violation of the City’s transient occupancy tax chapter (Chapter 3.24), including, without limitation, for any failure to pay such transient occupancy tax, that violation will result in a suspension of their vacation rental registration for twelve (12) months. “Incidental” Use of Residences One of the primary issues involved in the City’s regulation of vacation rentals is the concept that vacation rentals of residential properties is, and should be, considered an incidental use of that residence. Specifically, the City’s current vacation rental ordinance provides that a person cannot maintain any financial interest in more than one vacation rental property. For this purpose, the City’s current ordinance provides that a financial interest includes both “legal and beneficial ownership, as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental.” The City has received at least one request, by a married couple, to allow two (2) residential properties to be registered as vacation rentals. In the City staff’s opinion, the ownership and operation of two (2) residential properties by a married couple (or a couple in a domestic partnership) is inconsistent with the concept of “incidental” use of that residence. As such, the proposed ordinance clarifies the rule prohibiting any financial interest in more than one (1) vacation rental, by declaring that a person will be deemed to have a financial interest in a vacation rental that is owned by his or her spouse or registered domestic partner, regardless of any pre- or post- nuptial agreements to the contrary. Item 3A - Page 5 City Council Staff Report November 10, 2022 -- Page 6 Vacation Rental Ordinance Regular Review of VR Ordinance Regulations As discussed at the October 17 City Council meeting, the proposed ordinance provides that the City Council will review its vacation rental regulations no later than two (2) years from now. Additional Regulatory Issues In addition to the issues that City Council identified at the October 17 Council meeting, City staff has identified issues that staff believes need to be addressed at some point. Such issues can be summarized as follows: • LLC - tighten up regulations to not allow multiple LLC ownership of LLC applying - LLC’s must be owned by natural persons only. Add additional regulations to prevent investor-owned properties, not allowing LLC members to be a trust, and no 401k. • Add the option for virtual check in. This was addressed earlier this year by administrative regulation. This should only be applicable to vacation rental homes. Homeshare properties should still require in-person check-ins since the owners should be there at the property. • Remove walk up trash service for homeshares, remove provision to request an exemption from walk up service. • Provide that VR permit holders cannot use online booking platforms for photo shoots, weddings, pool rentals, etc. • Stricter penalties for contract summary violations. Presently, the penalty is a 6- month suspension and $2,500 fine. Suspension should be a minimum of 5 years. • Adding penalties for agencies who are bad actors. There have been 3 permanent ineligible properties due to agency advertising prior to obtaining permit. • Properties that were found to be renting without a VR certificate cannot apply for VR permit for one-year. Also, at time of applying, the new owner must verify the purchase – no transfers. • Clean up issues, such as clarifying that “Agent” means “Owner” where applicable. Changing the definition of “transient” to be consistent with the TOT ordinance’s definition. Moratorium At the October 17 City Council meeting, the City Council adopted a temporary pause on the processing of vacation rental permit applications and the issuance of vacation rental permits. This was done in order to prevent a rush on certificate applications, pending the completion of the Council’s consideration of further regulations. The moratorium is set to expire on November 30, 2022. Item 3A - Page 6 City Council Staff Report November 10, 2022 -- Page 7 Vacation Rental Ordinance Should the Council believe that its immediate objectives have been met with the accompanying ordinance, the Council may wish to consider removing or modifying the current pause on processing and issuing vacation rental certificates. Should the Council wish to do so, the City Council can provide direction at the time of the first reading of the accompanying ordinance, so that the action on the moratorium can be incorporated into the ordinance. ENVIRONMENTAL ASSESSMENT: This Ordinance is not subject to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) pursuant to Section 15060(c)(2) and 15060(c)(3) of the State Guidelines, because the Ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment and is not a "project," as that term is defined in Section 15378 of the State Guidelines. In addition, the City Council also determines this Ordinance consists of regulations intended to ensure that the incidental short term rental use of residential property remains an ancillary and secondary use of residential property in the City and thereby preserve the residential character of the City's single-family and multi-family neighborhoods as identified in the City's adopted General Plan, and its concomitant Environmental Impact Report. Thus, to the extent there is any environmental impact from the adoption of this Ordinance, the City Council finds that the Environmental Impact Report for the adopted General Plan is the controlling environmental document. ALIGNMENT WITH STRATEGIC PLANNING: This action is in alignment with the City Council’s adopted Strategic Plan, Item 1E – Neighborhood Issues, which calls for a review of the City’s vacation program. FISCAL IMPACT: This action is not likely to have a significant fiscal impact on the City. REVIEWED BY: Department Director: Veronica Goedhart City Attorney: Jeffrey S. Ballinger Interim City Manager: Teresa Gallavan ATTACHMENTS: A. Proposed Vacation Rental Ordinance Item 3A - Page 7 ATTACHMENT A Item 3A - Page 8 55575.18100\40823888.1 ORDINANCE NO. ____ AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING AND RESTATING CHAPTER 5.25 OF THE PALM SPRINGS MUNICIPAL CODE, REGARDING VACATION RENTALS City Attorney’s Summary This ordinance amends in part and restates the City’s Chapter regulating vacation rentals within the City of Palm Springs. WHEREAS, because the City of Palm Springs is a vacation destination, there has long been a market for short-term home rentals; and WHEREAS, since 2008, City ordinances have expressly allowed the short-term rental of single family dwellings, subject to various conditions designed to protect the interests of neighboring residents (as well as the City’s own interest in collecting transient occupancy taxes (TOT); and WHEREAS, in 2017, the City enacted Ordinance No. 1918, which re-enacted the previous ordinances, with amendments, which, among other things, made a new finding that the ordinance was consistent with the City’s Zoning Code; and WHEREAS, Ordinance No. 1918 (codified as Chapter 5.25 of the Palm Springs Municipal Code) imposed additional restrictions on occupancy and use of vacation rental properties in Palm Springs different and complimentary to restrictions initially included in previous ordinances, and provided additional enforcement oversight; and WHEREAS, Chapter 5.25 includes a requirement for a vacation rental permit, as well as significant operational requirements, standards and a rigorous vacation rental enforcement program; and WHEREAS, Ordinance No. 1918 was upheld by the California Court of Appeals, in Protect Our Neighborhoods v. City of Palm Springs, Case No E074233 (Jan. 2022), as against challenged based on the California Environmental Quality Act (CEQA) as well as the California Planning and Zoning Law; and WHEREAS, since the adoption of Ordinance No. 1918, other communities within the region have adopted additional regulations or prohibitions on short-term vacation rentals; and WHEREAS, over the course of several public meetings, including City Council meetings held on March 29, 2022, September 29, 2022 and October 17, 2022, the City Council has received and heard input from various stakeholders within the community; and Item 3A - Page 9 55575.18100\40823888.1 Ordinance No. _____ Page 2 WHEREAS, following the March 29, 2022 City Council meeting, the City established a Vacation Rental Working Group, which was tasked with providing input to the City regarding the possible need for further regulations on vacation rentals; and WHEREAS, based on the input of the Vacation Rental Working Group, as well as the input of numerous members of the community, the City Council wishes to adopt the regulations contained in this ordinance, in order to prevent the use of vacation rentals from becoming a nuisance within the City. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The City Council hereby amends Palm Springs Municipal Code Chapter 5.25 (Vacation Rentals), as set forth in Exhibit A, attached hereto and incorporated by reference herein. SECTION 2. The City Council shall review and consider the regulations contained in this Ordinance, including potential further regulations, no later than two (2) years following the adoption of this Ordinance. SECTION 3. The City Council finds and determines that this Ordinance is not subject to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) pursuant to Section 15060(c)(2) and 15060(c)(3) of the State Guidelines, because the Ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment and is not a "project," as that term is defined in Section 15378 of the State Guidelines. In addition, the City Council also determines this Ordinance consists of regulations intended to ensure that the incidental short term rental use of residential property remains an ancillary and secondary use of residential property in the City and thereby preserve the residential character of the City's single- family and multi-family neighborhoods as identified in the City's adopted General Plan, and its concomitant Environmental Impact Report. Thus, to the extent there is any environmental impact from the adoption of this Ordinance, the City Council finds that the Environmental Impact Report for the adopted General Plan is the controlling environmental document. SECTION 4. The provisions of this Ordinance are severable. If any portion, section, subsection, paragraph, clause, sentence, phrase, work, or application of this Ordinance is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Ordinance. The City Council declares that it would have adopted this Ordinance and each and every portion, section, subsection, paragraph, clause, sentence, phrase, word, and application not declared invalid or unconstitutional without regard to whether any portion of this Ordinance or application thereof would be subsequently declared invalid. Item 3A - Page 10 55575.18100\40823888.1 Ordinance No. _____ Page 3 SECTION 5. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after passage. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS _____ DAY OF ______________, 2022 LISA MIDDLETON MAYOR ATTEST: BRENDA PREE CITY CLERK Item 3A - Page 11 55575.18100\40823888.1 Ordinance No. _____ Page 4 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, Brenda Pree, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. ____ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Springs City Council on _________ and adopted at a regular meeting of the City Council held on __________ by the following vote: AYES: NOES: ABSENT: ABSTAIN: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, 2022 BRENDA PREE CITY CLERK Item 3A - Page 12 55575.18100\40823888.1 Ordinance No. _____ Page 5 EXHIBIT “A” ORDINANCE TEXT ATTACHED ON FOLLOWING PAGES Item 3A - Page 13 Chapter 5.25 VACATION RENTALS 5.25.010 Title. 5.25.020 Findings. 5.25.030 Definitions. 5.25.040 Registration Certificate Required. 5.25.045 Caps on Certificates based on Neighborhood. 5.25.050 Agency. 5.25.060 Vacation Rental Registration Requirements. 5.25.070 Operational Requirements and Standard Conditions. 5.25.075 Specific Prohibitions. 5.25.078 Homesharing Authorization. 5.25.080 Audit. 5.25.085 Disclosure of Business Entities, Limited Liability Companies, and Personal or Family Trusts. 5.25.090 Violations. 5.25.100 Requirements Not Exclusive. 5.25.010 Title. This Chapter shall be referred to as the “Vacation Rental Ordinance.” 5.25.020 Findings. The City Council finds and determines as follows: (a) The primary use of single-family and multi-family dwelling units in the City of Palm Springs is the provision of permanent housing for full time and part time residents of the City who live and/or work in the City. Vacation Rentals and Homesharing are not uses specifically recognized in the City’s Zoning Ordinance, nor are these uses expressly identified as uses permitted in single-family or multi-family zones. Vacation Rentals and Homesharing are similar in character and use as hotels and other commercial short term uses and can only be permitted in single-family or multi-family zones if such uses are ancillary and secondary to the residential use of property. This Ordinance confirms Vacation Rentals and Homesharing as ancillary and secondary uses of residential property in the City. (b) The purpose of this Chapter is to establish a regulatory program for Vacation Rental and Homesharing lodging, with appropriate standards that regulate vacation rental of residential property, minimize adverse effects of vacation rental uses on surrounding residential neighborhoods, ensure that vacation rentals and homesharing are ancillary and secondary uses of residential property consistent with the provisions of the City’s Zoning Ordinance, preserve the character of neighborhoods in which Vacation Rental and Homesharing uses occur, and provide an administrative procedure to preserve existing visitor serving opportunities and increase and enhance public access to areas of the City and other visitor destinations. Item 3A - Page 14 (c) Limiting Vacation Rental and Homesharing lodging to single-family dwelling units subject to the regulations provided in this Chapter and prohibiting Vacation Rental and Homesharing lodging in apartments will safeguard, preserve, and protect residential housing stock in the City. (d) The adoption of a comprehensive code to regulate issuance of, and attach conditions to, Registration Certificates for Vacation Rental and Homesharing lodging within single-family residential neighborhoods and the related use of residential property preserves the public health, safety, and welfare. This Chapter provides a permitting process and imposes operational requirements consistent with the ancillary and secondary status of Vacation Rentals and Homesharing, for the purpose of minimizing the potential adverse impacts of transient uses on residential neighborhoods. (e) This Chapter is not intended to regulate hotels, motels, inns, time-share units, or non-vacation type rental arrangements including, but not limited to, lodging houses, rooming houses, convalescent homes, rest homes, halfway homes, or rehabilitation homes. 5.25.030 Definitions. For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: “Apartment” means (a) a residential unit in a multi-family development of two (2) dwelling units where both dwelling units are rented or leased for occupancy as a residence for individual families, and (b) a residential unit in a multi-family development of three (3) or more dwelling units. “Applicant” means the Owner. “Bedroom” means an area of a Vacation Rental normally occupied and being heated or cooled by any equipment for human habitation, which is 120 square feet and greater in size, consists of four walls to the ceiling, at least one of which is located along an exterior wall with a window, and contains a built-in closet. “Business Entity” means a corporation, partnership, or other legal entity that is not a natural person or a personal or family trust or a limited liability company consisting solely of natural persons. “Change of Property Ownership” means the transfer of title from one person to another. “Cluster or Compound” means any two or more Vacation Rentals that operate on a unified or shared basis where residents of such Vacation Rentals have exclusive access to more than one Vacation Rental and/or the facilities of such Vacation Rentals, including by way of example, a swimming pool, tennis court, or cooking facilities. “Contract” means an agreement or evidence of any tenancy that allows or provides for the vacation rental of property. Item 3A - Page 15 “Daytime occupancy” means the hours between 10:00 am and 10:00 pm. “Daytime occupants” mean the guests who may occupy a Vacation Rental during a daytime occupancy. “Enforcement Official” means the City Manager, the Police Chief, the Fire Marshall, the Building Official, or one or more of their respective designees. “Existing Permittee” means a property for which a Vacation Rental Registration Certificate has been issued, or for which a complete application has been filed with the City, on or before October 17, 2022. “Exclusive listing arrangement” means a written agreement between an Owner and an agent or representative where the agent or representative has the sole and exclusive right to rent or lease a Vacation Rental unit to any person and the Owner is prohibited from renting or leasing the Vacation Rental unit except through the Owner’s agent or representative. “Estate Home” means a single family dwelling with five or more bedrooms. “Good cause” for the purposes of denial, suspension, revocation, imposition of conditions, renewal, and reinstatement of a Vacation Rental Registration Certificate, means (1) the Applicant, Owner, the Owner’s Agent, or the Local Contact Person has failed to comply with any of the terms, conditions, or provisions of this Chapter or any relevant provision of this Code, State law, or any rule or regulation promulgated thereunder; (2) the Applicant, Owner, Owner’s Agent, or Local Contact Person has failed to comply with any special conditions that were placed upon the Vacation Rental Registration Certificate by the Enforcement Official; or (3) the Vacation Rental has been operated in a manner that adversely affects the public health or welfare or the safety of the immediate neighborhood in which the Vacation Rental is located. “Good Neighbor Brochure” means a document prepared by the Enforcement Official that summarizes general rules of conduct, consideration, and respect, including without limitation provisions of the Palm Springs Municipal Code applicable to or expected of guests to the City. “Homeshare Interest” means a portion of an Owner’s home that is subject to homesharing as provided in this Chapter. “Homesharing” means an activity whereby the Owner hosts visitors in the Owner’s home, for compensation, for periods of twenty-eight (28) consecutive days or less, while the Owner lives on-site and in the home, throughout the visitor’s stay. “Hotline” means the telephonic service operated by or for the City for the purpose of receiving complaints regarding the operation of any Vacation Rental and the forwarding of such complaints to the appropriate city enforcement officials or, if applicable, the Local Contact Person. For the purposes of this Chapter, the term “Hotline” also includes any contact in person or by telephone, email, and digital or electronic communication, or correspondence of any kind to and/or from any Enforcement Official. Item 3A - Page 16 “Junior Vacation Rental Registration Certificate” means a Vacation Rental Certificate authorizing fewer annual Contracts and for which a lower registration fee shall be charged. “Local contact person” means the Owner, a local property manager, or agent of the Owner, who is available twenty-four hours per day, seven days per week for the purpose of responding in-person within thirty (30) minutes to complaints regarding the condition, operation, or conduct of occupants of the Vacation Rental, or any agent of the Owner authorized by the Owner to take remedial action and who responds to any violation of this code. “Neighborhood” means a City-recognized neighborhood, as set forth in Palm Springs Municipal Code Chapter 2.55 (Office of Neighborhoods). For those areas within the City that are not located within a City-recognized Neighborhood, the City Council may, by ordinance or resolution, determine that, for purposes of this Chapter only, such area is contained in a particular City-recognized Neighborhood, or the City Council may recognize, for purposes of this Chapter only, a new Neighborhood. “New Permittee” means a property for which a complete application for a Vacation Rental Registration Certificate was filed with the City after October 17, 2022. “Owner” means the natural person or persons who is/are the owner of record of the Property. The term “Owner” also includes a personal or family trust consisting solely of natural persons and the trustees of such trust or a limited liability company and the members of such company, insofar as the disclosure requirements pursuant to Section 5.25.085 are satisfied. The term “Owner” does not include a Business Entity. “Property” means a residential legal lot of record on which a Vacation Rental is located. “Rental Term” means the period of time a Responsible Person rents or leases a Vacation Rental. “Responsible Person” means an occupant of a Vacation Rental who is at least twenty-five (25) years of age and who shall be legally responsible for compliance of all occupants of the unit and/or their guests with all provisions of this Chapter and/or this code. “Third Quarter” means the entire months of July, August, and September in one calendar year. “Vacation Rental” means a single-family dwelling, or any portion thereof, utilized for occupancy for dwelling, lodging, or sleeping purposes without the Owner being present for a period of twenty-eight (28) consecutive days or less, other than ongoing month-to-month tenancy granted to the same renter for the same unit, occupancy of a time-share basis, or a condominium hotel as defined in Section 91.00.10 of this Code. The term “vacation rental” is synonymous with “short term rental” and “transient use” and does not include homesharing. Item 3A - Page 17 “Vacation Rental Registration Certificate” or “Registration Certificate” means the annual permit and/or a registration for a Vacation Rental or a Homeshare Interest issued by the City pursuant to this Chapter. “VR Neighborhood Percentage” means a percentage derived by dividing the total number of residential dwelling units within a Neighborhood that have been issued a Vacation Rental Registration Certificate by the total number of residential dwelling units within that Neighborhood, and multiplying that quotient by one hundred (100). For purposes of calculating the VR Neighborhood Percentage Cap, residential apartments and residential condominiums shall not be included. In addition, any residential dwelling unit (including any single family residence) that is located within a common interest development (also known as an HOA) whose control has been transferred from the originator of that common interest development/HOA shall not be included in calculating the VR Neighborhood Percentage Cap. “VR Neighborhood Percentage Cap” means the maximum VR Neighborhood Percentage allowed by the City Council in each Neighborhood. The VR Neighborhood Percentage Cap is set at twenty percent (20%). This VR Neighborhood Percentage Cap may be adjusted by the City Council by ordinance or resolution. 5.25.040 Registration Certificate Required. (a) The operation of a Vacation Rental or a Homeshare Interest without a Vacation Rental Registration Certificate is prohibited. (b) A Vacation Rental Registration Certificate shall not be issued to any Business Entity other than a limited liability company. A natural person, limited liability company, or personal or family trust shall not maintain any financial interest in more than one Vacation Rental. For this purpose, financial interest includes both legal and beneficial ownership as well as any arrangement that provides for receipt of any portion of the revenues generated by the Vacation Rental. For purposes of this section, a person shall be deemed to have a financial interest in any Vacation Rental that is owned by his or her spouse or registered domestic partner, regardless of the terms of any contractual arrangement, such as any transmutation (i.e., pre- or post- nuptial) agreement. An Owner shall only be issued, and can only maintain, one Vacation Rental Registration Certificate at any time. (c) The provisions of Subsection (b) of this Section shall not apply to or be enforced against any Owner who operates a Vacation Rental pursuant to a valid Vacation Rental Registration Certificate issued prior to January 10, 2017 and shall only apply to each specific Vacation Rental owned by such Owner as of January 10, 2017 and only so long as such Owner for each Vacation Rental complies with the provisions of this Code. The purpose of this exception is to afford current owners of vacation rental property a reasonable opportunity to recoup costs reasonably invested for vacation rental use and which may not have been recouped during the period of vacation rental use and which cannot be recouped once the vacation rental use is terminated. (d) Each Owner of a Vacation Rental who rents, exchanges, trades, gifts, or grants such Vacation Rental for a period of twenty-eight (28) consecutive days or less shall fully Item 3A - Page 18 comply with all provisions of this Chapter related to the use and occupancy of a Vacation Rental, and the operational requirements, provided in this Chapter. Each rental, exchange, trade, gift, and grant of a stay of less than twenty-eight (28) days shall count as one Contract. (e) No Owner of residential property in the City shall rent any Homeshare Interest for a period of twenty-eight consecutive days or less without a valid Rental Registration Certificate for Homesharing pursuant to this Chapter for such Homesharing Interest. (f) A copy of the current Registration Certificate as issued by the City and the maximum number of guests allowed on the premises shall be displayed in a clear and legible manner in a conspicuous and easily accessible location in the unit and on all advertising related to each Vacation Rental or Homesharing Interest, including without limitation, web based advertising, hosting platform, print media, and television. (g) The issuance and or renewal of a Registration Certificate shall be deemed evidence that the holder of such Registration Certificate has registered a vacation rental property with the City and that the holder acknowledges the holder’s obligation to comply with all provisions of this Chapter and the Code. The issuance of a Registration Certificate shall not be construed as bestowing or granting any vested right or entitlement. 5.25.045 Caps on Certificates based on Neighborhood. The City shall not issue any new Vacation Rental Registration Certificate in any Neighborhood in which the VR Neighborhood Percentage Cap has been exceeded or would, with the issuance of any such Certificate, be exceeded. 5.25.050 Agency. (a) An Owner may retain an agent with an exclusive listing arrangement or a representative to assist in the compliance with the requirements of this Chapter, including, without limitation, the filing of a complete Vacation Rental registration the management of the Vacation Rental unit or units, and compliance with the requirements of this Chapter including the collection and payment to the City of all transient occupancy taxes due and payable on the Vacation Rental unit. The Owner and any such agent or representative of Owner must have the authority to evict any tenant, resident, or guest permitted to reside at the Vacation Rental for violation of any provision of this Chapter or regulation thereof. Except as provided in Subsection (b) of this Section and notwithstanding any agency relationships between an Owner and an agent or representative, the Owner of the Vacation Rental unit or units shall execute all applications and documentary requirements as provided in this Chapter and shall remain responsible for compliance with the provisions of this Chapter. The failure of an agent to comply with this Chapter shall not relieve the Owner of the Owner’s obligations under the provisions of this Chapter. (b) In the event an Owner enters into an exclusive listing arrangement, the Vacation Rental registration certificate may be secured, and the transient occupancy registration certificate requirements provided in this Chapter may be performed, by the agent or representative and not by the Owner; however, the agent or representative shall separately account all revenues and Item 3A - Page 19 costs on a per property basis, including without limitation transient occupancy taxes and the gross rent amounts used to calculate such taxes. 5.25.060 Vacation Rental Registration Requirements. (a) Prior to use of a property as a Vacation Rental, and annually thereafter, the applicant shall register the property as a Vacation Rental with the City on a registration form furnished by or acceptable to the Enforcement Official and signed by the applicant under penalty of perjury. Each application shall contain the following information: (1) The name, address, and telephone number of the Owner of the unit for which the Vacation Rental registration certificate is to be issued. The name, address and telephone numbers of any other natural persons, limited liability companies or personal or family trusts that hold any financial interests in the Vacation Rental as well as copies of legal documents creating such financial interests. (2) The name, address, and telephone number of the exclusive listing agent, if any, of the Owner of the unit. (3) The name, address, and twenty-four-hour telephone number of the Local Contact Person and verification that the Local Contact Person can respond in-person to the site of the Vacation Rental within thirty (30) minutes. The Local Contact Person may only use the address of the Vacation Rental if the Local Contact Person will be present at the unit for the duration of each Contract. (4) The address of the residential property proposed to be used as a Vacation Rental. (5) The number of bedrooms and the applicable overnight and daytime occupancy limit of the unit consistent with the provisions of Section 5.25.070 (c). (6) Evidence of a valid business license issued by the City for the separate business of operating Vacation Rentals or submission of a certificate that Owner is exempt or otherwise not covered by the City’s Business Tax Ordinance (Division II, Title 3 of the Palm Springs Municipal Code) for such activity. (7) Evidence of a valid transient occupancy registration certificate issued by the City for the Vacation Rental unit. (8) Acknowledgement of receipt and inspection of a copy of all regulations pertaining to the operation of a Vacation Rental. (9) Executed indemnification and hold harmless agreement in a form approved by the City Attorney, agreeing to indemnify, save, protect, hold harmless, and defend the City of Palm Springs, the City Council of the City of Palm Springs, individually and collectively, and the City of Palm Springs representatives, officers, officials, employees, agents, and volunteers from any and all claims, demands, damages, fines, obligations, suits, judgments, penalties, causes of action, losses, liabilities, or costs at any time received, incurred, or accrued as a result of, or Item 3A - Page 20 arising out of Owner’s actions or inaction in the operation, occupancy, use, and/or maintenance of the Property. (10) Evidence of insurance coverage as required under Section 5.25.070(t) of this Chapter. (11) Completion of building, fire, and safety inspection and completion of any corrections identified by an Enforcement Official. Such inspections shall include a review of the premises for compliance with the operational requirements of this Chapter, including without limitation determining the total number of qualified bedrooms. (12) Written acknowledgement in a form approved by the Enforcement Official that there are no covenants or other deed restrictions on the property that prohibit or limit the use of the property as a Vacation Rental. The Enforcement Official may accept a written consent from the governing board of a homeowners’ association with jurisdiction over the property in satisfaction of this requirement. (13) An attestation by the Owner that the Owner intends to reside within the Vacation Rental for the minimum time period required by Section 5.25.070(w), below. In addition, for each annual registration, the application shall contain an attestation that (during the prior calendar year, or pro rata portion thereof) the Owner has actually resided within the Vacation Rental for the minimum time period required by Section 5.25.070(w), below. (14) Such other information as the Enforcement Official deems reasonably necessary to administer this Chapter. (b) The registration of a Vacation Rental shall be accompanied by a fee established by resolution of the City Council; provided, however, the fee shall be no greater than necessary to defer the cost incurred by the City in administering the provisions of this Chapter. (c) A Vacation Rental registration certificate shall be denied if a registration certificate for the same unit and issued to the same Owner has previously been revoked pursuant to Section 5.25.090. The denial of a registration certificate for any reason may be appealed in accordance with to the provisions of Chapter 2.50 of the Municipal Code. (d) Upon Change of Property Ownership, the Registration Certificate shall expire and the property shall not be used as a Vacation Rental until the new or successor Owner is issued a Vacation Registration Certificate for the property. The provisions of Section 5.25.040(b) shall be applicable to any such new or successor Owner. In the event of a change in agent or the occurrence of any other material fact set forth in the annual registration, a new registration for a Vacation Rental shall be required to continue operation of the Vacation Rental and within seven days of said change the Owner or his or her exclusive listing agent shall submit the required registration and fee. (e) The Owner or his or her exclusive listing agent shall cancel the Vacation Rental Registration Certificate within seven (7) days of the date the Vacation Rental is sold or otherwise disposed of or after an event that results in the unit no longer in use as a Vacation Rental. Item 3A - Page 21 (f) Each applicant for a Registration Certificate, including without limitation the Owner and the Owner’s agent and/or representative, shall annually attend and/or participate in an educational program devised and administered by the City Manager for the purpose of training applicants for vacation rental registration certificates, or renewals thereof, on their respective roles and responsibilities in the successful administration and compliance with the City’s Vacation Rental program. Each applicant shall annually take a test prepared and administered by the City Manager regarding each applicant’s role and responsibilities in the Vacation Rental Program and Registration Certificates will not be issued or renewed until the applicant has successfully passed such test. 5.25.070 Operational Requirements and Standard Conditions. (a) The Owner shall use reasonably prudent business practices to ensure that the Vacation Rental unit complies with all applicable codes regarding fire, building and safety, health and safety, and all other relevant laws. (b) No more than thirty-two (32) Contracts for Vacation Rental use of a property shall be allowed or provided in any calendar year; however, up to four (4) additional Contracts shall be allowed or provided for the Third Quarter of a calendar year so long as the entire term of each such Contract occurs during such Third Quarter. For any property for which a Junior Vacation Rental Registration Certificate has been issued, no more than six (6) Contracts for Vacation Rental use of that property shall be allowed or provided in any calendar year. A Contract includes any occupancy of a property subject to a Vacation Rental registration certificate by persons other than the Owner when the Owner is not present during such occupancy, regardless of whether compensation is paid for such occupancy or whether occupancy is evidenced in an agreement or document. (i) In the event the number of fully executed and enforceable Contracts for a Vacation Rental of a property for calendar year 2017 exceed the Contract limitations provided above as of February 15, 2017, such limitations shall not apply; however, no new or additional Contracts for such property shall be allowed for calendar year 2017. (ii) For the first year a Vacation Registration Certificate is in effect, the thirty-two (32) contract limit shall be prorated based on the number of months that elapse prior to the subsequent calendar year and in the event any portion of the Third Quarter occurs during the first year a Vacation Registration Certificate is in effect, the four (4) additional Contracts may be used during such Third Quarter. (iii) For Existing Permittees, the thirty-two (32) (with optional four (4) additional Third Quarter Contracts) Contract limitation above shall be reduced to twenty (20) (with optional four (4) additional Third Quarter Contracts), on January 1, 2025. For New Permittees, on and after the effective date of this ordinance, no more than twenty (20) Contracts for Vacation Rental use of a property shall be allowed or provided in any calendar year; however, up to four (4) additional Contracts shall be allowed or provided for the Third Quarter of a calendar year so long as the entire term of each such Contract occurs during such Third Quarter. Item 3A - Page 22 (iv) Notwithstanding the restrictions imposed by this Subparagraph, the Owner at the time an application or renewal is submitted can designate and file with the Enforcement Official the names of up to five (5) persons who may occupy the Vacation Rental unit at no cost and without requiring the presence of the Owner on the premises of the Vacation Rental. Each such occupancy shall fully comply with all other provisions of this Chapter. (c) The Owner shall limit overnight occupancy of the Vacation Rental unit to a specific number of occupants, with the maximum number of occupants as no more than two (2) persons per bedroom within each Vacation Rental unit and a maximum of no more than eight (8) persons total within the Vacation Rental unit, except that Owner may allow up to two (2) minor children, age 12 or under, to occupy the Vacation Rental in addition to the maximum number of occupants otherwise provided in this Subsection. The number of bedrooms in a Vacation Rental shall be verified by the Enforcement Official using County Assessor and/or City Building records and/or a physical inspection of the premises, prior to the issuance of a Registration Certificate. The Owner may also allow up to four (4) daytime occupants in addition to the total number of guests allowed for overnight occupancy pursuant to this Subsection. No more than one (1) automobile per bedroom shall be allowed for each Vacation Rental. Advertising and/or renting one or more Vacation Rentals as part of a cluster or compound is prohibited. (d) The Owner of an Estate Home shall be exempt from the limitations of Subsection (c) of this Section for up to two (2) additional bedrooms for housing to accommodate no more than two (2) persons for each additional bedroom approved pursuant to the Exemption up to a maximum of twelve (12) guests and up to two (2) minors age twelve (12) and under. (e) During the Rental Term each Vacation Rental unit is rented, the Owner, his or her agent, and/or the Local Contact Person designated by the Owner, after being contacted by the Enforcement Official, shall be available twenty-four hours per day, seven days per week, for the purpose of (1) responding by telephone within fifteen (15) minutes of complaints from or through the Hotline and (2) responding in-person within thirty (30) minutes to any additional or successive complaints regarding the condition, operation, or conduct of occupants of the Vacation Rental. (f) The Owner shall use reasonably prudent business practices to ensure that the occupants and/or guests of the Vacation Rental unit do not create unreasonable noise disturbances, engage in disorderly conduct, or violate provisions of the Municipal Code or any state law. (g) Notwithstanding the provisions of Section 11.74.043, any radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or any machine or device for the producing or reproducing of any sound shall be conducted within a fully enclosed Vacation Rental unit and shall not be audible at the property line of the Vacation Rental. (h) Prior to occupancy pursuant to each separate occasion of rental of a Vacation Rental, the Owner or the Owner’s agent or representative shall enter into a written Contract with a Responsible Person where (1) the Responsible Person will provide the Responsible Person’s name, age, address, and a copy of a government issued identification; (2) establishes and sets out the terms and conditions of the Contract, including without limitation occupancy limits, noise Item 3A - Page 23 -- prohibitions, and vehicle parking requirements; (3) requires the Responsible Person to acknowledge and agree that he or she is legally responsible for compliance of all occupants of the Vacation Rental or their guests with all provisions of this Chapter and/or the Municipal Code; (4) the Owner or the Owner’s Agent provides a copy of the “Good Neighbor Brochure” to the Responsible Person; (5) the Responsible Person provides a list of all guests by name; and (6) the Responsible Person provides a list of all guests’ vehicles, including license plate numbers. Each Contract shall be maintained by the Owner or the Owner’s Agent for a minimum of four (4) years and shall be readily available for inspection upon request of the Enforcement Official. A summary or abstract of the written Contract, in a form approved by the Enforcement Official, shall be filed with the Enforcement Official prior to occupancy, in a manner approved by the Enforcement Official, and shall be posted in a conspicuous location on the Vacation Rental property and shall be made available on site at the request of an Enforcement Official. (i) The Enforcement Official shall be the first responder and have primary responsibility for the enforcement of this Chapter. In the event the Enforcement Official notifies the Owner, or his or her agent, the Owner, or his or her agent, that the responsible person, including any occupant and/or guest of the Vacation Rental unit, has created unreasonable noise or disturbances, engaged in disorderly conduct, or committed violations of provisions of the Municipal Code or any state law, shall promptly respond in a timely and appropriate manner to prevent a recurrence of such conduct by those occupants or guests, and evict one or more of the guests when requested by the Enforcement Official. For the purpose of this Subsection and Subsection (j) below, the phrase “in a timely and appropriate manner” shall mean in-person contact within thirty (30) minutes for any call from the Enforcement Official (j) Failure of the Owner or his or her agent to respond to calls or complaints regarding the condition, operation, or conduct of occupants of the Vacation Rental in a timely and appropriate manner shall be grounds for imposition of penalties as set forth in this Chapter. It is not intended that an Owner, agent, or Local Contact Person act as a peace officer or place himself or herself in an at-risk situation. (k) Trash and refuse shall not be left stored within public view, except in proper containers for the purpose of collection by the collectors and between the hours of five a.m. and eight p.m. on scheduled trash collection days. The Owner of the Vacation Rental unit shall use reasonably prudent business practices to ensure compliance with all the provisions of Chapter 6.04 of the Municipal Code (Waste Disposal and Diversion), and shall provide “walk-in service” or as may otherwise be approved by the Enforcement Official. (l) All home repairs (external and internal), garden and yard maintenance, and pool cleaning and maintenance shall not be performed between the hours of 5:00 pm on Friday through 8:00 am on Monday, except in the case of an emergency or the occurrence of an unexpected event that reasonable warrants a timely or immediate response. Repairs and maintenance shall not be scheduled in advance to occur during the days and time specified in this subsection. (m) The Owner or the Owner’s agent or representative shall meet the Responsible Party in person at the Vacation Rental or the Owner’s or Owner’s agent’s office prior to, or within twenty-four (24) hours of, the commencement of the occupancy and verbally explain and Item 3A - Page 24 describe all rules and regulations applicable to the use of the property as a Vacation Rental and the responsibilities of the Responsible Party to the neighbors and the City as well as the Owner. The Owner shall secure the signature of the Responsible Party and all adult guests to a statement of rules and regulations prepared by the City Manager prior to or within twenty-four (24) hours of the arrival of the guest at the Vacation Rental. (n) The Owner of the Vacation Rental unit shall post a copy of the Registration Certificate and a copy of the conditions set forth in this Section, including all rules and regulations applicable to the use of the property as a Vacation Rental, on the inside of the front door and the primary door to the backyard or in a conspicuous location near each such door. (o) The Owner shall provide each occupant of a Vacation Rental with the following information prior to occupancy of the unit and/or post such information in a conspicuous place within the unit: (1) The name of the managing agency, agent, rental manager, Local Contact Person, or Owner of the unit, and a telephone number at which that party may be reached on a twenty- four-hour basis; (2) The maximum number of occupants permitted to stay in the unit; (3) The trash pick-up day and applicable rules and regulations pertaining to leaving or storing trash or refuse on the exterior of the property; (4) Notification that any radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or any machine or device for the producing or reproducing of any sound shall only be operated within a fully enclosed Vacation Rental unit and shall not be audible at the property line of the Vacation Rental; (5) Notification that the occupant may be cited or fined by the City and/or immediately evicted by the Owner pursuant to state law, in addition to any other remedies available at law, for creating a disturbance or for violating any provision of this Chapter; (6) Notification that failure to conform to the occupancy requirements of the Vacation Rental unit is a violation of this Chapter; (7) A copy of this Chapter of the Palm Springs Municipal Code, as may be amended from time to time. (p) The use of a Vacation Rental unit shall not violate any applicable conditions, covenants, or other restrictions on real property. (q) The Owner shall comply with all provisions of Chapter 3.24 of the Municipal Code concerning transient occupancy taxes, including, but not limited to, submission of a monthly return for each Vacation Rental in accordance with Section 3.24.080. The monthly return shall be filed each month regardless of whether the Vacation Rental unit was rented or not during each such month. Item 3A - Page 25 (r) The City Manager shall have the authority to impose additional standard conditions, applicable to all Vacation Rental units or identifiable classes of Vacation Rentals, as necessary, to achieve the objectives of this Chapter. A list of all such additional standard conditions shall be maintained and on file in the Office of the City Clerk and such offices as the City Manager designates. (s) Notwithstanding the provisions of Subsection (p) above, upon a determination of Good Cause, the City Manager may impose additional or special standards or requirements for placement or imposition of special conditions or performance standards for Owners, Owner’s Agents, Local Contact Persons, and their affected Vacation Rentals. The standard conditions may be modified by the Enforcement Official upon request of the Owner or his or her agent based on site-specific circumstances for the purpose of allowing reasonable accommodation of a Vacation Rental. All requests must be in writing and shall identify how the strict application of the standard conditions creates an unreasonable hardship to a property such that, if the requirement is not modified, reasonable use of the property for a Vacation Rental would not be allowed. Any hardships identified must relate to physical constraints to the subject site and shall not be self-induced or economic. Any modifications of to the standard conditions shall not further exacerbate an already existing problem. (t) The City Manager shall have the authority to establish administrative rules and regulations, which may include, but are not limited to, registration conditions, reporting requirements, inspection frequencies, enforcement procedures, advertising restrictions, disclosure requirements, or insurance requirements, consistent with the provisions of this Chapter, for the purpose of implementing, interpreting, clarifying, carrying out, furthering, and enforcing the requirements and the provisions of this Chapter. No person shall fail to comply with any such regulation. A copy of such administrative rules and regulations shall be on file in the Office of the City Clerk. (u) Owner shall procure, maintain, and pay premiums for commercial insurance policies that cover short term rental of property for each Vacation Rental with minimum limits as may be established by the City Manager from time to time. (v) Owner shall annually secure a building and fire and safety inspection prior to renewal of the Vacation Registration Certificate. (w) For New Permittees, Owner shall reside in the Vacation Rental at least ninety (90) days, whether consecutive or not, per calendar year (or pro rata portion of such calendar year). On and after January 1, 2028, for all Permittees, whether New or Existing Permittees, Owner shall reside in the Vacation Rental at least ninety (90) days, whether consecutive or not, per calendar year (or pro rata portion of such calendar year). (x) No Vacation Rental, including any Junior Vacation Rental, shall be used as an Event House, as that term is used in Palm Springs Municipal Code Chapter 5.75. The City shall not issue an Event House Permit to any property for which a Vacation Rental Registration Certificate or a Junior Vacation Rental Registration Certificate has been issued and remains valid. Item 3A - Page 26 (y) If, at the time of any annual renewal of a Vacation Rental Registration Certificate, the holder has not registered with the City seven (7) or more Contract summaries/abstracts in the prior calendar year, that Certificate shall automatically be renewed, if at all, as a Junior Vacation Rental Registration Certificate. In such event, the owner of such property shall not qualify for a regular Vacation Rental Registration Certificate if the Vacation Rental Percentage Cap for that Neighborhood is, or would be, exceeded. 5.25.075 Specific Prohibitions. (a) No person or entity shall offer or provide an Apartment, or any portion thereof, for rent for 28 consecutive days or less to any person. (b) No person or entity shall maintain any advertisement of a Vacation Rental that is in violation of any provision of this Chapter. (c) No person, including without limitation, an apartment owner, an apartment manager, or a representative of the apartment owner or manager, shall evict any tenant or otherwise terminate a lease for the purpose of converting an apartment to a vacation rental or in anticipation of converting an apartment to a vacation rental. In addition to any other remedy provided under the Palm Springs Municipal Code, failure to comply with this provision may be asserted as an affirmative defense in an action brought by or on behalf of the apartment owner, apartment manager, or representative to recover possession of the unit. Any attempt to recover possession of a unit in violation of this Ordinance shall render the apartment owner, apartment manager, or representative liable to the tenant for actual or punitive damages, including damages for emotional distress, in a civil action for wrongful eviction. The tenant may seek injunctive relief and money damages for wrongful eviction and the prevailing party in an action for wrongful eviction shall recover costs and reasonable attorneys’ fees. (d) The provisions of Subsection (a) of this Section shall not apply to or be enforced against any person or entity who rents an apartment or portion thereof pursuant to a valid vacation Registration Certificate issued prior to April 15, 2016 for the period of time between April 15, 2016 through January 1, 2019. The purpose of this deferral of the enforcement of the provisions of this Section is for persons or entities issued valid vacation registration certificates prior to April 15, 2016 to be afforded a reasonable opportunity to recoup costs reasonably invested for vacation rental use of apartments and which may not have been recouped during the period of vacation rental use of the apartment and which cannot be recouped once the vacation rental use is terminated. (e) The provisions of Subsection (a) of this Section, Subsection 5.25.040(b) [limits on number of units], and Subsection 5.25.070(b) [limits on number of Contracts] shall also not apply to any building in which an apartment is located that meets all requirements of an R-1 occupancy under the City’s building and fire code and for which such apartment has a valid Vacation Rental Registration Certificate issued prior to April 15, 2016. Ed. Note. Subsection (d) of Section 5.25.075 shall be deemed repealed and no longer in effect as of 12:01 am on January 1, 2019 and all persons and entities shall fully comply with the provisions of Subsection (a) of Section 5.25.075 of this Code. See § 4 of Ord. 1902 (2016). Item 3A - Page 27 5.25.078 Homesharing Authorization. (a) The Notwithstanding any provision of this Chapter to the contrary, homesharing shall be authorized in the City, provided that the Owner complies with each of the following requirements: (1) Obtains and maintains at all times a Vacation Rental Registration Certificate for Homesharing; (2) Operates the Homesharing Interest in compliance with all Vacation Registration Certificate for Homesharing conditions, which may be imposed by the Enforcement Official to effectuate the purpose of this Chapter; (3) Collects and remits Transient Occupancy Tax to the City and complies with all City Transient Occupancy Tax requirements as set forth in this Code; (4) Takes responsibility for and actively prevents any nuisance activities that may take place as a result of homesharing activities; (5) Complies with all applicable laws, including all health, safety, building, and fire protections laws; (6) Complies with the regulations promulgated pursuant to this Chapter. (b) In the event the Owner of a Homeshare Interest does not live on-site, in the home, and is not able to respond within thirty (30) minutes to complaints regarding the condition, operation, or conduct of occupants of the Homesharing Interest, the property shall be deemed a Vacation Rental and Owner shall be required to fully comply with the provisions of this Chapter relating to Vacation Rentals, including without limitation, securing a Vacation Rental Registration Certificate. 5.25.080 Audit. Each Owner and agent or representative of any Owner shall provide the Enforcement Official with access to each Vacation Rental and the books, records, documents, papers, tax returns, and bank accounts at any time during normal business hours as the Enforcement Official may determine are necessary or convenient for the purpose of inspection or audit to determine that the objectives and conditions of this Chapter are being fulfilled. 5.25.085 Disclosure of Business Entities, Limited Liability Companies, and Personal or Family Trusts. On or before June 1, 2017, all Business Entities, limited liability companies, and personal or family trusts owning one or more Vacation Rentals shall disclose to the Enforcement Official the names, relevant contact information, and any such other information as may be requested by the Enforcement Official of each natural person holding the legal, equitable, and/or beneficial interest of each such Business Entity, limited liability company, or personal or family trust and the address of each Vacation Rental owned by each such Business Entity, limited Item 3A - Page 28 liability company, or personal or family trust. Each Business Entity that complies with the provisions of this Section prior to June 1, 2017, shall, prior to June 1, 2018 transfer each Vacation Rental to a natural person who can otherwise comply with the provisions of this Chapter or cease operating any Vacation Rental properties owned by the Business Entity as Vacation Rentals. Any Business Entity that fails to comply with the disclosure requirements provided in this Subsection, shall cease operating all Vacation Rental properties owned by the Business Entity as Vacation Rentals no later than June 1, 2017. 5.25.090 Violations. (a) Any person who violates a provision of this Chapter is subject to criminal sanctions and administrative penalties pursuant to Chapters 1.01 and 1.06 of this Code and the specific penalties as provided in this Chapter. Any person who uses, or allows the use of, residential property in violation of the provisions in this Chapter is guilty of a misdemeanor for each day in which such residential property is used, or allowed to be used, in violation of this Chapter. An administrative citation issued pursuant to Chapter 1.06 for a first violation shall be five hundred dollars ($500.00) and each subsequent violation shall be one thousand ($1,000.00) dollars. Each administrative citation for a violation of any provision of this Chapter shall be levied or assessed against the Owner. (b) Upon the third violation in any twelve month period, the City Manager shall suspend the Vacation Registration Certificate for two (2) years. Notwithstanding the preceding sentence, in the event any person who operates a Vacation Rental in violation of the City’s transient occupancy tax chapter (Chapter 3.24), including, without limitation, for any failure to pay such transient occupancy tax, shall result in a suspension for twelve (12) months. (c) Any person who operates a Vacation Rental without a Vacation Registration Certificate, shall be liable to the City for the payment of transient occupancy tax pursuant to the provisions of the Palm Springs Municipal Code Chapter 3.24, including without limitation penalties and interest, payment of an administrative fine in the amount of Five Thousand Dollars ($5,000.00), and permanent ineligibility to operate a Vacation Rental in the City. In the event the person continues to operate a Vacation Rental without a Vacation Registration Certificate, the person shall be liable for an administrative fine in the amount of Ten Thousand Dollars ($10,000.00) and any successive violations shall be subject to fines provided in an escalation formula established by the City Council by resolution. (d) Any person who advertises a Vacation Rental without including the Vacation Registration Certificate in any advertising for such Vacation Rental, or operates a Vacation Rental without a contract, or without providing the City with a summary or abstract of such contract, or without timely tendering full monthly payments of transient occupancy tax, shall pay a fine in the amount of Two Thousand, Five Hundred Dollars ($2,500.00) and the Owner’s Vacation Registration Certificate shall be suspended for six (6) months for a first offense and shall pay a fine in the amount of Five Thousand Dollars ($5,000.00) and the Owner’s Vacation Registration Certificate shall be revoked for a second offense. Any subsequent violations will be subject to the provisions of Subsection (c) of this Section. Item 3A - Page 29 (e) The failure of an Owner or the Owner’s agent or representative to comply with an order of any police officer shall result in the revocation of the Vacation Registration Certificate. (f) The appeal and hearing provisions of Chapter 2.50 shall apply to any revocation or suspension of a Registration Certificate. (g) Any person who fails to pay any fee or charge provided in this Chapter within the time required, shall pay a penalty in the amounts established by the City Council by resolution. Such penalty may also include interest from the date on which the fee or charge became due and payable to the City until the date of payment. (h) The filing of knowingly false claims against a Vacation Rental or the guests staying in a Vacation Rental is prohibited and shall be punishable by administrative fines as provided in Chapter 1.06 of this Code. (i) In addition to, and not in lieu of, any other remedy allowed by law, all remedies prescribed under this Chapter are cumulative and the election of one or more remedies does not bar the City from the pursuit of any other remedy, criminal, civil, or administrative which may be pursued by the City to enforce this Chapter and/or address any violation of this Code or to remedy any other public nuisance. 5.25.100 Requirements Not Exclusive. The requirements of this Chapter shall be in addition to any license, permit, or fee required under any other provision of this Code. The issuance of any permit pursuant to this Chapter shall not relieve any person of the obligation to comply with all other provisions of this Code pertaining to the use and occupancy of Vacation Rental or the property on which it is located. Item 3A - Page 30                     ATTACHMENT 7  Recorded Document Recorded Document 8/14/2023 ©2005-2020 First American Financial Corporation and/or its affiliates. All rights reserved. The Recorded Document images are displayed in the subsequent pages for following request: State CA County Riverside Document Number 2021.661758 Limitation of Liability for Informational Report IMPORTANT – READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT, LEGAL OPINION, OPINION OF TITLE, TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT, OR ANY FORM OF TITLE INSURANCE OR GUARANTY. THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR, AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR WRITTEN CONSENT. FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR, AND THE INFORMATION HEREIN IS PROVIDED WITHOUT ANY WARRANTIES OF ANY KIND, AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN'S SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT’S USE OF THE INFORMATION HEREIN. ATTACHMENT 8  Recorded Document Recorded Document 8/14/2023 ©2005-2020 First American Financial Corporation and/or its affiliates. All rights reserved. The Recorded Document images are displayed in the subsequent pages for following request: State CA County Riverside Document Number 2021.585180 Limitation of Liability for Informational Report IMPORTANT – READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT, LEGAL OPINION, OPINION OF TITLE, TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT, OR ANY FORM OF TITLE INSURANCE OR GUARANTY. THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR, AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR WRITTEN CONSENT. FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR, AND THE INFORMATION HEREIN IS PROVIDED WITHOUT ANY WARRANTIES OF ANY KIND, AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN'S SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT’S USE OF THE INFORMATION HEREIN. ATTACHMENT 9  Recorded Document Recorded Document 8/14/2023 ©2005-2020 First American Financial Corporation and/or its affiliates. All rights reserved. The Recorded Document images are displayed in the subsequent pages for following request: State CA County Riverside Document Number 2021.585181 Limitation of Liability for Informational Report IMPORTANT – READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT, LEGAL OPINION, OPINION OF TITLE, TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT, OR ANY FORM OF TITLE INSURANCE OR GUARANTY. THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR, AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR WRITTEN CONSENT. FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR, AND THE INFORMATION HEREIN IS PROVIDED WITHOUT ANY WARRANTIES OF ANY KIND, AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN'S SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT’S USE OF THE INFORMATION HEREIN. ATTACHMENT ϭϬ  Recorded Document Recorded Document 8/14/2023 ©2005-2020 First American Financial Corporation and/or its affiliates. All rights reserved. The Recorded Document images are displayed in the subsequent pages for following request: State CA County Riverside Document Number 2022.62876 Limitation of Liability for Informational Report IMPORTANT – READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT, LEGAL OPINION, OPINION OF TITLE, TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT, OR ANY FORM OF TITLE INSURANCE OR GUARANTY. THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR, AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR WRITTEN CONSENT. FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR, AND THE INFORMATION HEREIN IS PROVIDED WITHOUT ANY WARRANTIES OF ANY KIND, AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN'S SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT’S USE OF THE INFORMATION HEREIN. ATTACHMENT 11