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HOA regulations trump city ordinance as far as short-term vacation rentals are concerned

According to a city survey, a number of vacation rental homes are located in Niguel Beach Terrace. The neighborhood’s regulations don’t allow such property uses and city staff will not grant permits until the issue is resolved amongst residents and property owners. Photo by Andrea Papagianis
According to a city survey, a number of vacation rental homes are located in Niguel Beach Terrace. The neighborhood’s regulations don’t allow such property uses and city staff will not grant permits until the issue is resolved amongst residents and property owners. Photo by Andrea Papagianis

By Andrea Papagianis

Nearly a week after the Jan. 15 application deadline for vacation rental permits, speakers stood before the City Council Tuesday night asking officials to accept their requests.

As the five-member body moved toward its final vote allowing rentals of less than 30 days in residential neighborhoods, five speakers from Niguel Beach Terrace urged the city to recognize their applications.

The city has so far denied permits in the condo community off Selva Drive because the neighborhood’s covenants, conditions and restrictions do not allow vacation rentals, City Attorney Patrick Munoz said.

But speaker after speaker contested this Tuesday, urging the city to issue permits or lose out on revenues.

“I view myself as a business owner in the city of Dana Point,” said Aaron Albertson of Laguna Beach, who owns two rentals in the complex.

“The mayor commented on the city’s desire to have strong relationships with the business owners,” Albertson added. “I hope we get that service and are granted our permits.”

The city’s changes now allow vacation rentals in communities where homeowners associations also allow them. The issue has long been debated in a vacation town, where residents and rentals owners try to strike a balance between day-to-day and vacation lifestyles.

Up to this point, city codes were silent on the issue, meaning vacation rentals were viewed as an illegal practice. But it was an unlawful use that went unregulated and unenforced. Now, owners of short-term vacation rentals must go through a permitting process, which involves an inspection, in order to operate.

Under the city’s change, short-term rentals will be subject to the Transient Occupancy Tax (TOT) that hotels, inns and campsites are. This 10 percent bed tax is placed on revenue generated by short-term rentals of less than 30 days.

According to a staff report, the city could collect roughly $400,000 annually from existing rentals. For now, at least, monies from Niguel Beach Terrace will not come.

Munoz said the city’s rental ordinances were structured to give neighborhoods the right to choose. He added that homeowners needed to vet the vacation rental issue internally, without city involvement.

Multiple owners mentioned a recent Niguel Terrace HOA rule change allowing vacation rentals. But with the homeowners association’s CC&R reading, “No owner shall be allowed to lease his unit for hotel and transient purposes,” according to Munoz, that rule is invalid.

“We have long interpreted our rules and regulations … to allow short-term vacation rentals,” said Betha Everett of Laguna Niguel. “We view this as a right of our home ownership.”

Councilmen Scott Schoeffel and Steven Weinberg expressed a desire to stay out of the neighborhood’s dispute, and encouraged homeowners to come to a resolution on their own.

Mayor Lisa Bartlett echoed the sentiment.

“You have a number of units there that are rented right now on a short-term vacation rental basis, and I think it is incumbent on those homeowners to get together,” Bartlett said, “If your association agrees at large that they want to have short-term rentals, then amend your CC&R and we can all move forward.”

The ordinance was approved in a 4-1 vote, with Councilman Carlos Olvera dissenting.

A recent search on (Vacation Rentals by Owner), shows about 220 rentals in Dana Point and Capistrano Beach. The site shows nearly 140 rentals in the Monarch Beach area, with many searches pulling up condos located in Niguel Beach Terrace, which neighbors Strand Vista Park.

Tuesday, Albertson estimated between 45 and 65 units in the complex are used as vacation rentals, which could account for a majority of such rentals—highly concentrated in one area—in the city.

Regardless of their numbers, no permits will be granted to Niguel Beach Terrace vacation rental owners until the neighborhood’s CC&R allows such rentals, staff said.

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comments (3)

  • My husband & I recently bought a home down the street from Nigel Terrace and during our 6 month renovation we chose to rent a unit here. The realtor told us that it was residential and very quiet. This has been nothing but quiet. When we arrived in May we had someone renting above us then in June we had 2 different families living each for 2 weeks each above us. Now we have a family of 6 living above us . It is so so noisy, kids screaming, and fighting, playing football in the parking lots, throwing random food by small children down on the terraces, long showers and washing machines never stopping. Guess they are unaware of the major drought we have here. My husband and I would never had rented had we know this was like this. We are only two people very quiet and in June I asked the owner if we could break the lease? We told her that we would never had rented had we known this was a busy in and out hotel . She told us we could only break the lease if we were out within 2 weeks. Well after we spoke and now it was almost July it was impossible to find a rental that was short term and furnished. We found one but could not get in until August 01 therefore we could not take it because the owner here wanted to rent her unit for the month of july so she could get $6,000 to 8,000 thousand a month. We also have been fighting an infestation of bugs and the owner was nice to have it sprayed monthly for us . One of the families that rented only for the 2 weeks told us it was also infested with bugs upstairs. I alerted the owner we are living in about the situation to advise the owner upstairs that he should also take care of this because all her spraying will be in vain . This is very noisy and there does not seem to be any rules here. People drive from all over and don’t seem to respect the water drought, keeping Nigel Terrace with clean walkways, and quiet. So far we have had no peace here and now the family above us has been the WORST !!! NOISE, Young boys fighting constantly, water running. It is awful and these units should not be rented for less than 3 months. Anything less still seems transient. I feel the realtors rent these places for families and know how to get around the one month minimum stay. Since we were here we saw two different families within one month. The family now told my husband they are here for a month but some more relatives will be joining. My gut is they will be here for 2 weeks and someone else will be in and they are just told to say this to us. I bet within the 2 weeks they are here they will be gone and another family will be in. My husband did not even ask them how long they are staying but she offered the information to let him know some other relatives will be joining. I believe they are told to say this because now our owner and the owner above know how unhappy we are here and forced to stay because we did not leave within 2 weeks during the month of June. It was impossible to move out during high season within 2 weeks. We needed 4 weeks to find a place. This seems that the owners here do not care about anything but to just make a quick buck . Sorry for this statement but they all seem to go to any extent to make money on these units and the ones that just rent seem to know how to get around the one month minimum. I mentioned this to our owner and what I thought and how unhappy we are still here and she never responded back to my e-mail. It is all about money here. I hope this gets straightened out and Dana Point enforces stricter rules. They are turning Nigel Terrace in to a low class honky tonk beach area. Enjoy your day.

  • My wife and I have been living in Niguel Beach Terrace since Jan and it has been overwhelming positive for us. We do not have ANY noise. Sorry your experience is so crappy. But we love it. We also like saying hello to some of the vacation people.

    • Based on my experience and many people who I have spoken with, these transient rentals are awful. Sure it may be fun for a week or so, but the novelty wears off quickly.
      Does ANYONE want to live in a motel? Don’t think so.

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