Short-term rental law unlikely to curb party houses in Vegas
A controversial bill passed by state lawmakers on the last day of the legislature requires Clark County to regulate short-term rentals, which are currently prohibited in unincorporated areas of the valley. But that’s unlikely to put an end to the most troublesome variety – party houses – whose owners are finding creative ways around the law.
“Total Max Homes is a unique company dedicated to providing the finest luxury vacation rental mansions in Las Vegas …” states a website offering vacation stays at a handful of properties with names like Dreams and Desires Mansion and Elegant Enchantment Mansion. The houses are mainly clustered in upscale neighborhoods near Sahara and Rainbow.
“All rentals will need to last longer than 31 days to comply with the current Clark County ordinance, ”the website said.
By requiring a lease of 31 days or more, Total Max Homes circumvents the county’s current ban on STRs and avoids payment of the transitional accommodation tax, a 13% levy applied to accommodations 30 days or less.
Gary Wu, the CEO of Total Max Homes, according to his LinkedIn page, did not respond to numerous requests for comment.
Neighbors say the homes draw crowds of visitors, vehicles and vices from Vegas vacations.
“We bought our homes with the belief that we would be entitled to a peaceful and quiet enjoyment,” says Lisa Skurow, real estate agent and resident of the area. She says some neighbors suspect that the properties have sometimes operated like mini brothels.
“People hire these places to do what they can’t do on the Strip – bring in a bus full of escorts in the middle of the night,” Skurow explains. “I had to explain to my young daughter twice who these scantily clad women with no shoes or coats are standing around the corner in winter.”
Party houses represent a fraction of short-term rentals in the valley, estimated between 8,000 and 18,000 by MP Rochelle Nguyen. But they ignite the most passion among the opponents.
Nguyen, who sponsored Assembly Bill 363, which requires Clark County to lift its ban on STRs, regulate them and recoup millions of dollars in lost tax revenue, included a provision requiring a two-night minimum stay at properties not occupied by the owner – an effort, she said, to prevent the rentals from being used as party houses. But the law only applies to properties rented for 30 days or less.
Nguyen did not respond to requests for comment on efforts by some party house owners to circumvent existing regulations.
“We’ve been fighting this for five years,” says Skurow, who says Neighbors finally met with Commissioner Justin Jones and the Las Vegas Metro Police at the home of retired federal judge Linda Riegle last month. “The police can go out for nuisance or criminal acts. ”
Jones, who represents the district, has tried to spice up county code enforcement with a proposal to add chronic nuisance assessments to the tax rolls. Landowners who did not pay eventually had their homes confiscated by Clark County. Senate Bill 57, who would have given the county the power to do so, died when banks and mortgage brokers clashed and threatened to restrict lending in Nevada.
The measure that was passed, AB 363, “is going to really change the landscape of Las Vegas,” says Skurow. “We are going to lose neighborhoods to people who think they are hoteliers. ”
“How does anyone close their eyes to what’s going on with these houses?” Asks Skurow, who says the properties are being renovated to accommodate more guests. “The first thing that goes up is the walls, so you can’t see inside.”
Code enforcement documents indicate significant unauthorized work on properties. The County Assessor website, which is used to determine the value of property tax, lists the square footage of properties that are several thousand feet smaller than those shown on real estate websites such as Trulia and Zillow. .
“They run gas lines, power lines – who knows what’s behind those walls because they aren’t inspected. They don’t use licensed contractors for this work, ”Skurow says. “It’s only a matter of time before he takes over a block, a house, a bachelor party or a porn video shoot.”
Internet is overflowing with suggestions on how vacation rental owners can avoid regulations and taxes. Violating the laws governing STRs is a cottage industry itself. Landlords who wish to bypass the designation as a short-term lease are urged to include a provision in a long-term lease allowing termination for a nominal fee.
“According to my research, a landlord cannot enter into a contract for the purpose of circumventing the current law regarding short-term rentals by entering into an agreement for more than 30 days on the face of it when the landlord and tenant have failed. no intention of honoring such a contract, ”said Las Vegas attorney Sagar Raich. “The Nevada Supreme Court has ruled for over 100 years that” agreements which contravene the purposes and purposes of the laws of the legislature, or as it is most often expressed, the policy of those laws, are void. “”
But challenging the operations will require resources that Clark County says are lacking, with the cost of implementing the new law’s provisions estimated to be $ 3.5 million per year in the next biennium.
“We have been pursuing the worst of the worst offenders for several years now and have brought them to justice,” Jones said. “Unfortunately, in two of the cases, the judge ruled that the county’s fines were arbitrary and capricious.”
Wu has appealed more than $ 100,000 in county fines imposed on four properties. Two of the four cases are pending.
In April, according to court records, Judge Timothy Williams ruled that the county “was arbitrary and capricious about the application of penalties” and had “no order as a basis for punishment.”
Williams ordered the county to “cancel all administrative citations, including fines and liens,” imposed on the owner, W&W Holdings LLC-Series A. Jennifer Wu and Gary Wu are listed by the state as managing members .
The attorney representing Wu did not respond to requests for comment.
The county has a three-pronged plan, according to Jones.
“We’re going to revise our ordinance to make it clearer so we don’t have this problem of whether it’s Title 11 or 30,” Jones said of the code differentiating short and long term rentals. “We will seek an injunction under the concept of chronic nuisance. “
“Beyond that, with the passage of AB 363, which contains certain mechanisms, we will have to look at what will be legal in the county.”