City Prevails in Lawsuit over Vacation Rental Regulations

Thursday, Nov. 17, Judge Robert Dahlquist of the Superior Court’s North County Division ruled in favor of the city of Encinitas in a lawsuit that challenged its ordinance for short-term vacation rentals, which are homes people can rent for 30 consecutive days or less.

The city adopted the ordinance in 2006 after residents complained about some of the issues related to vacation rentals, including loud and disorderly tenants, illegal parking and vandalism, overcrowding and traffic congestion. The ordinance requires property owners to get an annual $150 permit from the city for each short-term rental unit.

According to a news release from the city of Encinitas, in March 2010 property owner Chris Carrico filed a lawsuit claiming that: (1) the fees are excessive, established for revenue-generating purposes and, therefore, constitute an invalid tax, requiring a vote of the electorate; and (2) the ordinance language is unconstitutionally vague. 

Judge Dahlquist, however, ruled that: (1) the fees are not excessive, established for regulatory purposes and, therefore, do not constitute an invalid tax; and (2) the ordinance language is not unconstitutionally vague.

“The short term rental ordinance is an effective tool in correcting problems often associated with short term vacation rentals,” Encinitas Mayor James Bond said in the news release. “I am pleased the court acknowledged the proper purpose behind both the fee and ordinance.

The Encinitas City Council was briefed on this lawsuit during a closed session Wednesday, Nov. 30. During the , City Attorney Glenn Sabine reported that council directed him to continue to defend the ordinance if Carrico decides to contest the judge's ruling. 

If you would like more information about this lawsuit, Carrico v. City of Encinitas, you can find it on the Superior Court of California’s website. The case number is 37-2010-00087269-CU-MC-NC.

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