Las Vegas Whacks Homeowner With Fine Of Almost $200,000 For Unlicensed Airbnb Rental

Las Vegas recently issued a $180,000 fine to a city homeowner for allegedly operating an unlicensed short-term rental in 2021. The hefty fine reflects late fees and interest on an initial fine of $2,132, originally issued to homeowner Xin Tao in August 2021. This situation highlights the extreme measures some cities take to curb short-term rentals.

Considering that hotel room revenue is significant to the city's economy, it's no surprise that Las Vegas has a strict licensing system and code of conduct for short-term rentals. Xin Tao finds himself caught in the middle. According to Tao, the fine originated when a former tenant posted his home on Airbnb without his knowledge in 2021. Naturally, he thinks the former tenant should pay the fine.

Unfortunately for Tao, Las Vegas is fining him for allegedly "permitting" his house to be listed on Airbnb. Las Vegas authorities began looking into the address after receiving multiple complaints from residents who suspected a short-term rental was being operated there. This prompted the city to conduct more than 10 inspections of the premises before matching pictures of the house from both Realtor.com and Airbnb.com.

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That was all the evidence the city needed, and they issued a notice detailing the prohibition on short-term rentals along with the fine. Tao says he tried to evict the tenant, but since Airbnb and Las Vegas City Code Enforcement failed to provide him with evidence such as listings or inspection results, he lost the case. Tao said the company managing the short-term rental used photos of his home without permission.

He then brought his protest to City Hall, where he petitioned to have the fine lifted. During a January city council meeting on this issue, Las Vegas City Code Enforcement manager Eric McCoy certified that there was no short-term license for Tao's property. As a result, the city council voted to uphold the original fine and place a lien against the property for the outstanding balance.

The original $2,132 fine has grown to $180,000 because Las Vegas's short-term rental code calls for unpaid fines to incur a penalty fee of $500 per day without limit. So, the fine that Tao originally didn't pay has grown at a geometric rate and now it's large enough for his house to be auctioned off at a lien sale (although the city has not yet initiated the auction process).

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Tao has responded by suing the city. His attorney, Andrew Bao, believes that the city was negligent in allowing fines to accrue at the rate of $500 per day for two years without notifying his client of the debt. Bao also believes that the city's failure to notify his client about the fines violated Xin Tao's due process rights under the Nevada Constitution.

Bao's legal filing states, "To have a $2,132 fine astronomically balloon to $180,000, without notice for more than two years, is a violation of due process and Petitioner’s constitutional rights. Further, the $180,000 is an excessive fine and punishment in violation of Petitioner’s constitutional rights." Bao's suit demands $15,000 in damages plus attorney's fees, a reversal of the $180,000 fines, and an injunction preventing the city from foreclosing on Tao's home.

Unfortunately, Bao and his client have already lost one significant battle. At a May 13 hearing, District Judge Nadia Krall denied Bao's petition to have the fine thrown out because the property owner didn't appeal the fine within 25 days of the city council ruling that upheld the $180,000 fine. Krall's ruling stated, "Petitioner's failure to timely file his Petition leaves this Court without subject matter jurisdiction and the Petition must be dismissed."

That leaves Tao's fine intact, which means his house is still subject to a lien sale. Considering that Krall's ruling upheld the $180,000 fine, it's difficult to imagine the rest of Tao's lawsuit ending positively for him. It's an expensive lesson for Tao. Regardless of how Tao's lawsuit ends, Las Vegas has sent a clear signal that it won't handle unlicensed short-term rentals with kid gloves.

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