‘It’s over the top’: City upholds $55K penalty for illegal short-term rental

The Las Vegas City Council on Wednesday upheld $55,000 in civil penalties against a homeowner it accused of illegally operating a short-term rental, despite warnings that he was violating the city’s short-term rental ordinance.

The daily fines of $500 account for 110 days the city alleges X Management LLC, had rented a house near Oakey Boulevard and Arville Street.

“$55,000 on top of my mortgage is putting the place into, basically foreclosure,” owner Jonathon Foulks told the council. “It’s way too steep of a fine for what I did.”

Chances to stop

A code enforcement officer opened a case in April 2023 after a citizen complaint and informed Foulks about the ordinance, department manager Eric McCoy said.

In July 2023, the code enforcement officer found the home listed on Airbnb and sent Foulks a written notice asking him to stop, McCoy said. Foulks did not respond to the notice.

In August 2023, McCoy said, the officer called Foulks, who allegedly told the officer that “he doesn’t see how the city can tell him what to do with the property.” Foulks was warned that the city would take enforcement action, McCoy said.

Foulks told the council Wednesday that he had stopped renting the property until he established an LLC, which he thought had protected him.

“Obviously, the way that these facts are laid out, it’s making me look like I was trying to bypass a bunch of laws, and I wasn’t,” he said.

In his appeal, Foulks argued that his property was akin to a timeshare business in which renters had a stake in the property.

When Foulks did not hear back from the city after he established his LLC, he said, he believed that he wasn’t breaking the law.

“It’s off the books, as soon as this all happened it’s done, the property is actually losing a ton of money right now, it’s unrented, can’t find anybody to rent it,” he said. “As soon as I realized that the LLC wasn’t a good idea, I stopped it.”

Short-term rentals are allowed in Las Vegas but they must be licensed and are subject to city regulations. A similar Clark County ordinance is being challenged by the Greater Las Vegas Short-Term Rental Association before the Nevada Supreme Court.

Ultimately, the city found that Foulks had rented the house 110 days from August 2023 to Feb. 11, and continued listing it afterward, McCoy said.

City officials argued that had Foulks stopped the practice sooner, he could’ve likely avoided any penalties.

“It’s over the top,” Foulks said about the $55,000, “It’s basically gonna make me bankrupt.”

Council members discussed a possible reduction of fines, but chose to go with McCoy’s recommendation, they said, to be consistent and deter the practice.

Precedent

In January, the city imposed a $180,000 penalty on another homeowner who violated the ordinance.

“He could’ve contacted me directly, he could’ve contacted the officer directly,” McCoy said about Foulks. “He could’ve turned (this) around, or he could’ve contacted us for clarity, but the gentleman chose to go his route, and this is the penalty.”

City officials told Foulks that he could enter into a no-interest payment plan, but that if he didn’t comply, they could put a more costly lien on the property.

Foulks told the Las Vegas Review-Journal that he bought the house as an investment. He said he plans to hire an attorney to fight the penalties.

Mayor Carolyn Goodman told Foulks that she understood his financial situation.

“It’s a sad situation, but it is what it is, and that motion to appeal has been denied,” she said.

Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.