Board shuts down agent for Brazilian Court condo owners

Article Courtesy of The Palm Beach Daily News

By Aleese Kopf

Published January 23, 2015 

 

Several owners of condominium units at the Brazilian Court will have to find a new way to rent their properties.
 
The Code Enforcement Board voted 4-3 Thursday to shut down agent Leslie Diver, who managed rental inquiries for eight owners via an online vacation rental site. She also arranged cleaning and laundry services.

 

Town staff said Diver violated a town ordinance that prohibits using a building or land in a residential district for commercial or quasi-commercial purposes.

“We believe that Ms. Diver is conducting a hotel operation within the Brazilian Court Hotel,” said Code Enforcement Manager Raychel Houston. “Ms. Diver is renting out individual units at the hotel on a nightly, weekly or monthly basis. In effect, she has a competing hotel rental program in addition to the rooms that the hotel is renting themselves.”

Timothy Hanlon, Diver’s attorney, said owners have the right to rent their units and Diver is simply acting as an agent.

Condo rentals at The Brazilian Court Hotel were reviewed recently by the Code Enforcement Board.


 
“She receives no commission from the sales,” he said. “She doesn’t employ any cleaning services, she merely arranges for the work to be done. All the payment is done by the owners. There is no operation of a hotel. I think that is a gross exaggeration.”

Diver said she doesn’t receive money directly from the website or renters but does charge owners a $200 flat fee plus $25 an hour for additional services.

“You are getting paid and it’s in conjunction with certain services that you’re providing,” said Code Board Chairman Harris Fried. “You’re using that building, the physical edifice, to run a commercial or quasi-commercial business.”

Competing rental systems

Owners hired Diver to oversee renting their properties because they couldn’t get the hotel to do it, Hanlon said.

“The reality is, the developer-owned units get rented first so the poor owners are stuck in the back of the line,” he said. “They have no ability to rent their units, so they have to rent them on their own. What’s really going on here is the developer is upset that the owners are renting their units first and getting revenue instead of the developer. I think this is a private matter.”

Diver said she had to hire maid services because the hotel also would not clean for any owner who does not rent through the hotel rental pool.

The developer owns about a third of the 80 units in the building. The hotel rents its units as well as those owned by 30 or 40 people who participate in the hotel’s rental program, according to Richard Schlesinger, co-owner of the condominium hotel.

It’s true that the hotel’s units are rented first, Schlesinger said. The developer also receives about 50 percent of the rental revenue from owners who participate in the hotel’s program.

“When a unit owner participates in the rental program they have a number of options of different programs to choose, but in essence the hotel operation shares in the revenue,” Schlesinger said. “I believe that the rates we charge as a hotel are probably significantly higher than what she is charging.”

Town rental laws

Hanlon asked the board the difference between what his client is doing and what Realtors do on a regular basis.

“They rent out single-family homes, condominiums, co-ops every day, every week, every month,” he said. “Is Sotheby’s in violation?”

Town code allows owners to rent their residential properties three times per calendar year for periods of less than three months. Anything more is considered a commercial use.

“The big difference is a hotel can rent a room by the day, by the week or by the month,” said Zoning Administrator Paul Castro. “This is a different animal.”

A declaration of use agreement that grandfathers the hotel into the neighborhood as a “non-conforming use” also makes the Brazilian Court different, he said.

“The problem is not just related to the commercial activity but to an intensification of a non-conforming use,” he said. “It creates parking pressure on the street. It creates additional commercial activity within our pristine residential areas that was never contemplated, and that’s a big issue for us in the town.”

The board found Diver in non-compliance, charged a $150 administrative fee and ordered her to cease commercial activity at the hotel.

But not all members agreed.

“The owners have voluntarily agreed to let her aggregate everything,” said Anthony Dowell. “Where’s the right of free enterprise here?”

Friend and member Larry Ochstein also voted against the finding.

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