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Parts of Paradise Valley’s STR Ordinance Violate State Law

By April 1, 2022November 14th, 2022No Comments

By Melissa Rosequist | Daily Independent

An Arizona Attorney General’s Office investigation has found parts of Paradise Valley’s short-term rental ordinance violate state law.

In a March 30, written report Arizona Attorney General Mark Brnovich says “most of” Paradise Valley’s ordinance does not violate state law — however, specific provisions run afoul.

The investigation stems from a Feb. 28 legislator request for investigation filed by Sen. Warren Petersen, R-Gilbert.

“Based on a review of relevant authorities and materials during the limited 30-day period proscribed by A.R.S. 41-194(B), the office has determined that much of the ordinance does not violate state law. A few select provisions, however, do violate state law,” Brnovich wrote in his report.

Brnovich says the town violated state law with the specific provisions:

  • Limiting the use of short-term rentals for “social gatherings” that are residential in nature;
  • Regulating short-term rentals in the form of information disclosure beyond the scope of disclosure regulations permitted under state law;
  • Regulating short-term rentals in the form of an operating requirement beyond the scope of allowable regulations;
  • Allows a fine to be imposed against an “online lodging marketplace.”

Specifically, he says the town’s requirement for evidence of registration with the Maricopa County Assessor’s Office and evidence of a valid transaction privilege tax license is OK, however the remaining registration requirement and the booking information disclosure requirements are not permitted and do violate state law.

Further, he says the Attorney General’s Office determined the town’s liability insurance and landline requirements are permissible, however, the town may not require the owner of a short-term rental to meet in person with guests prior to the beginning of any occupancy and verbally explain and describe all rules and regulations applicable to the property.

Finally, Brnovich states, the town’s ordinance violates Arizona law to the extent it allows a fine to be imposed against an “online lodging marketplace.”

“Beyond these specific provisions, the Office has determined that the ordinance, on its face, does not otherwise violate the identified provisions of state law discussed herein,” Brnovich writes.

Because the town’s ordinance violates state law in part, Paradise Valley must “resolve the violation” as set forth in state law by either repealing or amending the ordinance such that it complies with state law.

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Related: Paradise Valley Responds to Short-Term Rental Rules Investigation