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Vacation Rental Company Sues Flagler County Two Weeks After Regulations Are Approved

| March 6, 2015

Sued. (© FlaglerLive)

Sued. (© FlaglerLive)

It didn’t take long.

Two weeks ago the Flagler County Commission unanimously passed an ordinance regulating the booming short-term vacation rentals industry in the Hammock. On Thursday, Steven Milo, head of Vacation Rental Pros, a leading industry broker in the Hammock and much of Northeast and Central Florida, sued the county commission. (the lawsuit also includes Milo’s Cinnamon Beach Way company. Both companies are based in Ponte Vedra in St. Johns County)


“I don’t see where this is unexpected,” Commission Chairman Frank Meeker said late Friday afternoon, though he hadn’t yet seen the lawsuit. He said a lawsuit was likely “no matter what we did” on the matter.

Milo, a frequent and vocal opponent of the regulations during the many meetings and hearings the commission has been holding on vacation rentals for more than two years years, filed an eight-count action that focuses on property, privacy and equal protection rights.

The privacy provision disputes Flagler’s right to collect the names of residents who stay in short-term vacation properties. It also disputes the rules’ geographic target. “The geographic area regulated by the Ordinance, unincorporated portions of the County located East of U.S. Highway 1, comprises only approximately 10 percent of Flagler County,” the suit states. “The regulations contained in the Ordinance are specifically and uniquely targeted to a single class of property owners, single family and two-family homes located almost exclusively in the Ocean Hammock Resort community, even though Ocean Hammock Resort was developed and marketed by the developer as a destination resort community where short-term vacation rentals were not only to be expected, but encouraged and welcomed.”

“The Commissioners passed a vindictive ordinance that will effectively prohibit certain types of vacation rentals in Flagler County,” Milo said in a statement. “We will vigorously fight for equal protection of all property owners and the privacy rights of the people we represent, and for all property owners who may want to rent their home at some point in the future.”

“Until the legislature did this, I’m not sure these guys didn’t have the right to do what they’re saying they have the right to do,” Meeker said, referring to the 2011 law the legislature passed, preempting local governments from regulating short-term rentals. That’s the law Meeker and Flagler County successfully lobbied the Legislature to amend last year, returning home rule on the issue to local governments, with some restrictions. And that’s an interesting argument right there. I’m not speaking for the county commission on that, but in my mind, I think clearly the Legislature granted them something that didn’t exist.”

Milo’s strategy contrasts sharply with a spate of recent–and unsuccessful–lawsuits filed by local pressure groups against Palm Coast and county government. Milo’s statement was part of a news release disseminated by Meteoric Media Strategies, a Tallahasse-based upstart PR firm led by two former communication aides to Gov. Rick Scott—Brian Hughes and Brian Burgess. The release noted Milo’s attorney: Daytona Beach’s Peter Heebner, who in September won a jury verdict worth almost $20 million against Ponce Inlet’s city government, in a property rights dispute. The release included that information, suggesting Milo is positioning himself to do battle as much against the commission as in the public opinion arena. The hint of intimidation may signal Milo’s interest in pushing the county to, if not repeal its ordinance—which state law explicitly permits—at least influence future amendments that would more favorably align with Milo’s interests.

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Milo also sued Venice in 2011 over Venice’s banning vacation rentals–and not grandfathering Milo. He won a $300,000 settlement for lost income and attorneys’ fees.

In a public appearance more than two years ago during a meeting on vacation rentals, when the county was drafting the legislature’s local representatives to push for a return to local control, Milo spoke of the dozens of jobs his company had created locally, and the 30,000-some guests who had stayed in properties he manages, swelling county coffers with bed-tax revenue. The exact claim has not been verified, but the county doesn’t dispute that short-term rentals have been an economic benefit. (The 4 percent sales surtax charged to hotel, motel and short-term renters has increased significantly in the last two years, but there’s not been an empirical study analyzing the source of the revenue, and various local events have generated a substantial increase in hotel stays.)

“They pump money into the local economy, businesses, some bought homes,” Milo said of short-term renters during a 2012 meeting.

Milo’s lawsuit indicates that Cinnamon Beach Way owns an 11-bedroom single-family house in the Ocean Hammock Resort, a house it bought for $835,000 specifically as a vacation rental property, to accommodate up to 24 guests. Vacation Rental Pros manages the rental of more than 70 single-family homes in Flagler, accommodating up to 24 guests each. The county’s new ordinance, the lawsuit charges, “will apply to the properties managed by VRP and will destroy the viability of the rental of the homes managed by VRP to families and vacationers on a short-term basis and cause damages to VRP.”

In late February the county passed a wide-ranging ordinance that limits the number of people who can stay in vacation rentals to 10 in a single-family home and to 16 in a two-family home while grandftahering in existing rentals over six years (after originally being set at 10): those who qualify may have up to 14 renters in a single-family home, though the provision is lost if the house is sold.

Meeker said he expects County Attorney Al Hadeed to “act as the quarterback” in the lawsuit, with outside, expert legal representation brought in to defend the action. “We’ve made a finding that we believe this is what’s reasonable to allow short-term vacation rentals to exist in a single family neighborhood,” Meeker said. “That’s all we’re doing. I’m sure Mr. Milo would have been happy if we’d set the upper limit to 30 people in a home.”

Read the full lawsuit below.

Steven Milo-Vacation Rental Pros vs. Flagler County (2015)

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7 Responses for “Vacation Rental Company Sues Flagler County Two Weeks After Regulations Are Approved”

  1. tulip says:

    I think the BOCC handled the matter MORE than fairly. In fact, because of the way the developer deliberately built these “hotels”, knowing it could be a business without having to follow the rules of legit hotels and motels, building it a residential area which in which people bought homes in good faith, I think they should’ve been cut off in two years. However, I am not an attorney and don’t know all the ins and outs of legal proceedings.

    I think the Board gave them ample time to recoup the business “loss” and, at the same time, made some rules about parking, traffic, noise levels, etc. in order to make it better for the residents.

    I think if these “homes” that were built to be used as aresort rental business should pay high fees for the license to do so, be made to have these homes equipped for commercial fire safety such as sprinklers, fire extinguishers, emergency lighting, etc. just like the motels do. 24 people in a house is a lot and anything could happen, so these places need to be “safe.

    I also think it is terrible unfair to allow those types of businesses to operate in a residential neighborhood and there should have been rules in place a long time ago.

  2. tomc says:

    Milo would trash any neighborhood for a few $. Hope the judge sends him packing.

  3. confidential says:

    This time BOCC is correct. There should be a way to enforce the rules that protect all the owners not only the rental properties ones. Often rental properties lack of abiding by the ordinances and or HOA’s Covenants and Rules undermine the value of the surrounding homes creating nuisances and attempting to break the peaceful coexistence among neighbors.

  4. DoubleGator says:

    Interesting Mr. Milo, I don’t know what private property rights you have since you don’t own the property. I see you signs every where. Your business model turns a good neighbor into otherwise. Sensible regulation is a must. Single family residential means just that. Not an unregulated commune next door!

  5. Lancer says:

    Can’t wait to hear the arguments. This was absolutely, positively going to happen…

  6. Shirley Welstead says:

    Steve Milo is a shark! I don’t reside in Flagler and am here as a vacationer in a respectable residential condo with rules and regulations. He is in the vacation rental business for the money. Period. I have come across his name so often while searching for a Florida rental and the comments are nearly always the same. E.g., blinds without slats, broken fixtures, keys not working for the condo, pool, etc. I hope Flagler County wins this case and stops him in his tracks. He is just like a slum landlord and ruins property values everywhere he goes. Now he’s even making money in lawsuits. Disgusting. Wonder how he lives with himself.

  7. Roger says:

    Mr. Milo sues everyone – our water company, our Board, the county, etc. His method is to intimidate and threaten. Several years ago he even circulated a video from his attorney to the Hammock Beach/Ocean Hammock property owners which threatened to sue those that voted to restrict these abusive rentals. Where else in America would one be sued for exercising their right to vote. We are fortunate that our County Commissioners have stepped in to right his wrongs.

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