The Las Vegas City Council on Wednesday imposed a $55,000 civil penalty on a homeowner who allegedly illegally operated a short-term rental despite warnings that he was violating the city’s short-term rental ordinance.

The $500 daily fines total 110 days for which X Management LLC rented a home near Oakey Boulevard and Arville Street, according to city records.

“$55,000 on top of my mortgage is effectively foreclosure on the house,” owner Jonathon Foulks told the council. “It’s far too much of a penalty for what I did.”

Opportunities to quit

A building code enforcement officer initiated proceedings in April 2023 following a citizen’s complaint and informed Foulks of the ordinance, department head Eric McCoy said.

In July 2023, the law enforcement officer found the house listed on Airbnb and sent Foulks a written notice telling 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 he “couldn’t understand how the city could dictate to him what to do with the property.” Foulks was warned that the city would take enforcement action, McCoy said.

Foulks told the City Council on Wednesday that he had stopped renting the property until he formed an LLC, which he said protected him.

“The way these facts are presented obviously gives the impression that I was trying to circumvent a number of laws, which was not the case,” he said.

In his appeal, Foulks argued that his property amounted to a timeshare transaction in which tenants owned an interest in the property.

When Foulks received no response from the city after forming his LLC, he believed he had not violated the law.

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

Short-term rentals are allowed in Las Vegas but 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 in the Nevada Supreme Court.

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

City officials argued that had Foulks stopped the practice earlier, he likely could have avoided penalties.

“This is excessive,” Foulks said of the $55,000. “It will basically bankrupt me.”

Council members discussed a possible reduction in fines, but decided to follow McCoy’s recommendation in what they believed would be a consistent approach to preventing such practices.

precedent

In January, the city fined another homeowner $180,000 for violating the ordinance.

“He could have contacted me directly, he could have contacted the officer directly,” McCoy said of Foulks. “He could have turned it around, or he could have contacted us to get clarity, but the Lord chose to have his way, and that is the punishment.”

The city told Foulks he could agree to an interest-free payment plan, but if he didn’t comply, they could place a more costly lien on the property.

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

Mayor Carolyn Goodman told Foulks she was understanding of his financial situation.

“It’s a sad situation, but it is what it is, and the appeal was rejected,” she said.

Contact Ricardo Torres-Cortez at [email protected].