Santa Monica Startup Law: Home-Sharing Ordinance Overview

Santa Monica's home-sharing ordinance lawThe City of Santa Monica’s home-sharing ordinance is proving to be a pain for some area startups.

NetChoice, an e-commerce and online business trade association, filed an amicus brief with the Ninth Circuit Court of Appeals arguing that the ordinance shirks federal law and hamstrings one of the most promising market sectors, web-based home-sharing (think Airbnb) and web-based ride-sharing (think Lyft) startups.

Santa Monica’s Home-Sharing Ordinance

What are the parameters of Santa Monica’s home-sharing ordinance? Adopted in 2015, the statute prohibits certain short-term rentals and establishes punitive home-sharing taxes. Moreover, authorities can fine “any host or hosting platform” caught violating the rules or impose a six-month jail sentence.

Santa Monica’s Home-Sharing Ordinance Law: The Resistance

Soon after Santa Monica’s home-sharing ordinance went into effect, online businesses launched a counter attack. Airbnb and Home Away went so far as to sue. But their arguments bombed with the bench. Final judicial assessment: the regulation does not violate the Communications Decency Act, First Amendment, or Coastal Act.

Not everyone is thrilled with the situation. Steve DelBianco, president and CEO of NetChoice, explained to Commercial Observer:

“Santa Monica was too clever by half with this ordinance. They are saying, ‘We aren’t controlling what you can say or list, but we are making it so that, if you take a nickel for anything that is booked, you’re liable, including jail time, if the host misrepresents the license.”

He continued:

“The ordinance is like holding a commercial leasing broker responsible if a restaurant tenant lied about having a business license, to the point of the leasing broker spending six months in jail due to the restaurant tenant misrepresenting the tenets of their license.”

What’s Next In the Santa Monica Home-Sharing Ordinance Legal Battle?

The legs of this legal battle are still twitching. Expect both sides to continue filing motions and duking it out in court.

Connect With A Santa Monica Startup Lawyer

In the meantime, if you’re in need of a Santa Monica startup lawyer, get in touch. HT Law works with all types of emerging businesses in the area, around the state, and across the country. Get in touch today. The consultation is on the house.

Contact A Santa Monica Startup Lawyer