Marco Island city attorney says 3 of 4 short-term rental lawsuits resolved

Marco Island has resolved three of the four lawsuits filed in opposition of its now defunct rental registration program.

"Of the four, three have been dissolved and are actually no longer of any merit and it was all taken care of and resolved," City Attorney Alan Gabriel told City Council Monday, March 18.

In August 2022, Marco Island voters approved a registration requirement for single-family homeowners who rent their properties less than 30 days at a time. Hurricane Ian made landfall a month later, disrupting most of life in Southwest Florida and would later nullify Marco Island's rental registration ordinance.

The ordinance went into effect on Dec. 5 after two public hearings. The registration portal was created and opened March 15, 2023, and the first lawsuit was filed 12 days later.

A total of 226 residents started the registration process, Assistant City Manager Casey Lucius said in November. Of those, 59 owners completed the process, and each paid the $800 fee.

A law signed by Gov. Ron DeSantis in June forced the City Council to cancel the ordinance and reimburse residents who signed up, as if it never happened. The law affects local governments within a 100-mile radius of Hurricane Ian, which made landfall Sept. 28, 2022 at Cayo Costa and then in Punta Gorda, as a near Category 5. The law prohibits "restrictive or burdensome" amendments by local governments to land development or comprehensive plans until October 2026 and nullifies any put in place after Ian hit.

Marco Island City Council on Oct. 2 approved an order ending the rental registration program by a 5-2 vote after Gabriel and a second attorney, hired for a second opinion, said the ordinance fell under the state law.

Marco Island spent almost $727,000 on the rental registration program through the purchase of software, new full-time employees, purchased vehicles and thousands of employee hours used on implementation. Homeowners who paid the fee have been reimbursed, Lucius said.

The four lawsuits challenged the validity of the ordinance. They were filed by Ferrarie (formally Reinalda Properties); the Florida Association of Realtors; Gulfcoast & Atlantic Corp.; and Howard D. Reitz.

The most recent case to be disposed was with the Florida Association of Realtors. According to court records, the case was disposed on March 13 with a joint voluntary dismissal from the association and Marco Island. Both agreed to handle their own legal fees.

Commercial real estate agency Gulfcoast & Atlantic Corp. is the one holdout, Gabriel said.

Also known as Horizons Rentals, Gulfcoast & Atlantic manages rentals in single-family residential zones on Marco Island.

In its lawsuit, Gulfcoast & Atlantic is asking for declaratory, injunctive and other relief because of the ordinance. Attorneys continue to argue whether the company still has a case, according to court documents.

"It has been a stickler. We're still fighting that case, trying to get it dismissed," Gabriel said. "Hoping to bring that forward shortly to you and announce that all cases have been resolved."

Lucius said any legal fees for the lawsuits are being charged to the city's insurance company.

Previously:Marco Island's controversial single-family home rental registration program tossed out

More:Marco Island spent $727,000 for rescinded vacation rental registration program