By Ryan M. McCabe

As I wrote back in February, the New Orleans City Council approved a new and comprehensive set of short-term rental regulations back in October 2016. Those new regulations went into effect on April 1 of this year.

Under these new regulations, short-term rentals are illegal in the French Quarter, except for a seven-block stretch of Bourbon Street known as the Vieux Carré Entertainment District. Short-term rentals are generally permitted in some form or fashion in other areas of the City, subject to various restrictions and permitting requirements.

On June 1, Jennifer Cecil of the City’s Short-term Rental Administration and I spoke to a standing-room-only crowd at an informational event hosted by the Vieux Carré Property Owners, Residents & Associates.

During that event, many of the attendees were skeptical about whether, despite the new regulations, the City would take any definitive action to end short-term rentals in the French Quarter.

Part of that skepticism was probably rooted in the fact that for years, the City’s Municipal Code and its Comprehensive Zoning Ordinance prohibited short-term rentals in the French Quarter. For various reasons, however, the City did not actively enforce the prohibition, leaving it to property owners and condominium associations to attempt enforcement through the court system. We have successfully handled multiple such cases. 

During the June 1 event, Ms. Cecil addressed the attendees’ concerns. She noted three issues I found especially interesting:

  1. The City has struck an enforcement deal with AirBnB, with AirBnB agreeing to remove its French Quarter listings as of midnight of that night. I just checked AirBnB, and while there are still a few French Quarter listings posted, the majority of them have been taken down.
  2. The City is in talks with the other major short-term rental website, vrbo.com, for a similar enforcement deal.
  3. The City has implemented new procedures for active and aggressive enforcement of the short-term rental prohibitions in the French Quarter.

It appears that the City is indeed following its new enforcement procedures. On June 21, our local newspaper reported that seven short-term rental operators in the French Quarter were collectively fined $17,000 for violating the new rules. Fines levied on individual owners ranged from $500 to $3,500, plus court costs. For opponents of short-term rentals, this is certainly a step in the right direction.

During the June 1 VCPORA event, a number of people had questions about what they should do if they live in an area where short-term rentals are allowed. The short answer I gave was this:

  • If you own a condominium, short-term rentals can be prohibited by the condominium documents, even if short-term rentals are allowed in that area.
  • If your condominium documents do not already prohibit short-term rentals, they can easily be amended to do so, provided that enough unit owners support the amendment.
  • If a condominium unit owner or his or her tenant violates a prohibition in the condominium documents against short-term rentals, the condominium association may be able to notice an administrative hearing and fine the offending unit owner and tenant. In some circumstances, the association may be able to record a lien against the unit for the amount of the fine and/or terminate “common services” such as water if the fine goes unpaid.
  • In the event of a violation, the condominium association may also go to court and seek an injunction and possibly damages.
  • Even if you live in the French Quarter, it might be a good idea to include a short-term rental prohibition in the condominium documents. The City’s laws are always subject to change, and there’s no telling whether the prohibition against short-term rentals in the French Quarter will remain after our upcoming mayoral and city council elections. Including such a prohibition in the condominium documents will eliminate this uncertainty.

 

Filed under: Condominiums, Industry News, Real Estate Litigation, Residential Real Estate
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