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Vacation Rental Company Violated Santa Monica Law, Judge Rules  

Bob Kronovet RealtyWe Love Property Management Headaches!

Convention and Visitors Bureau Santa Monica

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Harding, Larmore
Kutcher & Kozal, LLP

By Jorge Casuso

March 30, 2017 -- In a decision hailed by City officials as "a significant milestone," a judge this month found Globe Homes LLC engaged in more than 30 violations of the Santa Monica's short-term rental laws.

The March 6 decision in Los Angeles Superior Court, which is being appealed, affirmed 35 of the 36 violations uncovered during a year-long effort by the City Attorney’s Office and the Code Enforcement Division, officials said.

"When the case first began in early 2016, officers from the Task Force attempted to work with and educate Globe for many months," City officials said in a statement issued Wednesday. "However, these efforts were unavailing.

"Instead of coming into compliance, Globe continued to operate and expand its illegal vacation rentals within various residential dwelling units within the City, and it employed various tactics to deceive Task Force investigators."

Globe officials did not return a call for comment.

Unlike Airbnb -- a popular national listing service that allows individuals to share their homes with short-term renters -- Globe serves as a broker and, in some cases, offers management services, City officials said.

"We believe they are involved in (the rentals) much more directly," Chief Deputy City Attorney Yibin Shen told the Lookout. "They are present in the LA area, their listings are here and they have a much more intimate connection.

"They do way more than facilitate listings," Shen said. "In some cases they provide leasing and potential management."

According to Globe's website, as well as reviews of the service posted online, the company helps those wishing to rent their homes find vacation tenants and serves as the contact for the tenants, helping to troubleshoot problems.

Since the adoption of one of the nation's toughest short-term rental laws, Santa Monica has been cracking down on violators through its recently established Vacation Rental Enforcement Task Force.

Santa Monica's two-year-old law requires hosts to live at the site they are renting, pay the City's hotel tax and register by applying for City approval. The local law does not allow such rentals for longer than 30 days ("Santa Monica City Council Bans Short-Term Rentals Despite Protests," May 14, 2015).

In the case against Globe, which went to trail in December, "the Task Force’s trained investigators were able to successfully penetrate the subterfuge and confirmed multiple vacation rental violations," officials said.

“Illegal corporate vacation rental operators run counter to the City's longstanding prohibition against vacation rentals, said Salvador Valles, assistant director of Planning and Community Development, who oversees the task force.

They also run counter to "the true spirit of sharing one's home to earn extra income, which a person may do legally in Santa Monica,” Valles said.

Most of the Santa Monica rental properties found in violation in the Globe case were apartments and condominiums, Shen said.

"Most were multifamily rental units, which directly impact the availability of housing," he said.

City officials say the burgeoning vacation rental market is exacerbating a longstanding housing shortage in a City that has seen rents skyrocket to among the highest in the nation.

“In a community where 70 percent of residents are renters, it’s important to maintain our housing for permanent residents while also preserving the rich character of our neighborhoods,” Mayor Ted Winterer said in a statement Wednesday.

“This action against Globe does just this while also demonstrating that we are very serious about enforcing our home sharing ordinance,” Winterer said.

To report an illegal vacation rental business, contact the Task Force at 310-458-4984.

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