HomeMy WebLinkAboutSubCommittee recommendations
Date: June 26, 2024
To: Administrative Appeals Board, for discussion
From: Sub-committee on suggested ordinance changes: Patrick Basile and David Parker
Recent cases where out of town owners of a vacation rental property had assigned
responsibility for licensing and management of their short-term vacation rental to a
property management company raised some issues, and this sub-committee was asked to
explore possible ordinance changes for board approval and subsequent presentation to
Council. This discussion also prompted a look at the entire administration process, and
we’d like to visit that first.
ADMINISTRATIVE PROCESS
Over the previous two-year period, .05% of cases heard were overturned (2 of 35 cases).
While we’re not suggesting the cases upheld were not valid, it does prompt questions
about how well the community understands the ordinances and how they are
administered, especially considering the fee one pays to appeal a case. As a result, the
following process enhancements are put up for discussion for possible recommendation
to Council.
• Ensure prospective appellants are more aware.
o Ask escrow & title companies to add an addendum to their process, that
recommend STR investors visit the city’s website to educate themselves
AND that they check with any applicable HOA, to see if short-term rentals
are permitted in the community.
o Ask city staff to conduct a public informal session “What to Do if you’re
considering the short-term vacation rental business”.
o Reach out to Palm Springs Board of Realtor’s to ask if they can incorporate
city requirements into their client discussions.
PROPERTY MANAGEMENT COMPANY ENHANCEMENTS
We recommend establishing rules, standards and guidelines for property management
companies (the “Company”):
• Have property management that manage units in Palm Springs register with the City
and agree to follow the City’s Short Term Vacation Rental Ordinance (the
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“ordinance”). This would exclude internet companies who are only involved in
advertising and booking clients based upon the direction of the Owner/Company.
• When an Owner registers or renews the Unit’s license, any Company involved in the
rental must be identified and the type of management offered. The following terms
will define how rentals are being managed:
o Owner Management – Owner takes full responsibility for registering the Unit
with the City and for the managing and renting of the property.
o Split Management – Owner splits the responsibility for managing the Unit
with a Company but controls the booking calendar and the selection of the
tenants. The Company may/may not greet the tenants upon arrival but acts
as the local contact in the event there is an issue with the Unit.
o Agent Management – Owner assigns responsibility to the Company. The
Company may/may not assuming responsibility for licensing, but it controls
the calendar and tenant selection, plus other issues that may arise with the
Unit. The Owner expects the Company to manage the property at an
acceptable standard and adhere to the Ordinance.
For those Units designated as Agent Management category, the following processes would
apply:
• Require any Company before placing advertisements for a short-term rental ensure
the Unit has its license in place and is in full compliance with the Ordinance.
• If a Company advertises a Unit that is not licensed, or in full compliance, the
penalty goes to the Company, not the Owner. The first violation by the Company on
any Unit’s managed (as an example), will be $5,000. The second will be $10,000,
and the third, will be $20,000 plus a lifetime suspension of the Company and its
principals from managing Units in Palm Springs for other people. The Company
cannot pass the fines on to the Owner.
• Any infractions of the tenants that results in violations of the Ordinance should be
the responsibility of the Company (i.e., noise complaints, etc.). If the Company
receives six violations within a one-year period, the City Manager has the option to
suspend the Company’s ability to manage Units in Palm Springs for a period of one
year. Fines and the suspension cannot be passed on to the Owner.
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