co Yehudah Hassin agent for service of process for YBYC Inc 1 You are ordered to appear in person and produce rue and correct copies of the
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1 I IN THE MATTER OF FACTUAL LEGISLATIVE SUBPOENA INQUIRY RELATED TO Government Code ef seq INVESTIGATION OF CHAPTER 324 ET AL OF THE MALIBU Cll Date August MUNICIPAL CODE To Custodian of Records for YBYC Inc Time 630 pm Place City of Malibu City Hall Stuart Ranch Road Malibu California co Yehudah Hassin agent for service of process for YBYC Inc 1171 South Robertson Blvd 144 Los Angeles California You are ordered to appear in person and produce rue and correct copies of the documents specifi d in Attachment 1 at the Regular City Council Meeting for the City of Malibu City at Stuart Ranch Road Malibu California 9Q265 on August 11 2Q14 at630pm or as soon thereafter as the matter may be heard 2 You are not required to appear in person and produce the requested documents IF by 400 pm on Auqust you deliver the document described in Attachment 2 to Reva Feldman Assistant Gity Manager City af Malibt Stuart Ranch Road Malibu California All documenfs pro uced fio the City srall e accompa ie y a deciaration or affidavit warranting f their acc racy and completeness sufficient to meet the requiremer of Caof CivlProcedure sect on The City will pay all reasonable documer pd costs associated with photocopying the requested documerts t costs exceed 0 pease contact Trevor Rusin before copying The Cityre uires hesercor s to assis it invluating its transient occupancy tax codified in the City oi Mafi s Municip lcde sections 32 et al ard compliance therewith Thedoc menfs requested are mater ai and good caus exists for their production as dscribed i Attachment 3 his subp oer a is ssuedprsuant to California Government Cod section31g and authorized by the Nfalib City Council
2 I Disobedience of this subpoena will be referred to the Superior Court for enforcement and is punishable as contempt pursuant to Government Code section Should you have any questions regarding this subpopna pfease contact Trevor Rusin SBiV Assistant City Attorney for the City of Malibu Jenkins Hogin LLP 1230 Rosecrans Ave Suite 110 Manhattan Beach California Dated June City Council City of Malibu Attest By g t Skylar Peak Lisa rap Mayor City af Malibu CitCrkiyfMli a APPROVED AS TO FORIVJt By evor usin Jenkins in LLP Assistant City Attorney City of Malibu 2
3 ATTACHMENT 1 The following documents must be produced to the City Request 1 Documents sufficient to identify all persons that through any website or property owned or controlled by YBYC Inc including but not limited to www invacation com andwww vacationrentalsinmalibu comhave rented or offered to rent any HOTEL for a period of 30 consecutive days or less for dwelling use lodging or sleeping purposes in the City of Malibu California during the period from March through the present HOTEL means any structure which is occupied or intended or designed for occupancy by transients for dwelling lodging or sleeping purposes and includes any hotel inn tourist home or house motel studio hotel bachelor hotel lodging house rooming house apartment house rental unit dormitory public or private club mobilehome or house trailer at a fixed location or other similar structure or portion thereof and shall further include any trailer court camp park or lot where trailer spaces or combinations of such spaces and trailers including mobilehomes are occupied or intended or designed for occupancy by transients for dwelling lodging or sleeping purposes 1 Request 2 Documents sufficient to provide the following information for each person identified in response to Request 1 a The name physical address address and any other contact information for each person b The url for each website which the person used to list a HOTEL c The address of the person shotel that has been rented or offered to rent for dwelling use lodging or sleeping purposes in the City of Malibu through any website or property owned or controlled by YBYC Inc during the period from March through the present PROPERTY means the HOTEL S rented as described in this paragraph by the person d The dates and duration of stay for each time the PROPERTY was rented since March to present e The rate charged and funds collected for each time the PROPERTY was rented since March to present f The method of payment including name of institution and type of account for each time the PROPERTY was rented since March to present g The name of any person who rented any PROPERTY from a person identified in Request 1 since March to present as well as the renter sphysical address address and other contact information 3
4 h The total gross revenue generated by the person renting the PROPERTY as a result of that renting since March to present 2 If documents do not exist sufficient to provide all of the information requested the City requests that you produce electronically stored information that is sufficient to provide all of the information requested This information must be provided in pdf Microsoft Word or Microsoft Excel Format If production in this manner is not feasible then it must be produced in a different format agreed to by the City 4
5 ATTACHMENT 2 3 Alternativelv and in lieu of the documents requested in Attachment 1 you may provide a list identifying all persons that through any website or property owned or controlled by YBYC Inc including but not limited to www invacation com andwww vacationrentalsinmalibu comhave rented or offered to rent any HOTEL for a period of 30 consecutive days or less for dwelling use lodging or sleeping purposes in the City of Malibu California during the period from March through the present This list must also include the following regarding these rentals a The name physical address address and any other contact b information for each person The url for each website which the person used to list a HOTEL c The address of the HOTEL d The dates and duration of stay for each time the HOTEL was rented e The rate charged and funds collected for each time the HOTEL was rented f The method of payment including name of institution and type of account for each time the HOTEL was rented g The name of any person who rented any HOTEL as well as their physical address address and any other contact information h The total gross revenue generated by the person renting the HOTEL 5
6 ATTACHMENT 3 City Council Agenda Report 6
7 I ti p F Mq ad Mr Council Agenda Report City Council Meeting OS Item 6B To Prepared by Approved by Mayor Peak and the Honorable Members of the City Council Reva Feldman Assistant City Ma age Jim Thorsen City Manag Date pre ared May Meeting date May Subject Short term Residential Rental Subpoena RECOMMENDED ACTION Authorize the Mayor to issue subpoenas to websites advertising short term residential rental properties located in the City of Malibu as well as to owners and operators suspected of renting such properties The subpoenas will be used to investigate and obtain compliance with Malibu Municipal Code Chapter 324 The City currently collects approximately 1 million in Transient FISCAL MPACT Occupancy Tax TOT a year from hotels and motels An additional is collected from the short term rentals of private homes However after a thorough review of websites advertising short term rentals of private homes in Malibu the City believes that many private properties have not registered as short term rentals and are not paying the tax owed The City can use these subpoenas to investigate the nature of the problem and increase compliance with the City s ordinance potentially leading to several hundred thousand dollars of additional general fund revenue DISCUSSION Malibu Municipal Code MMC Chapter 324 authorizes the City to collect T4T when a hotel motel or residential home is occupied fr thirty consecutive calendar days or less The tax rate is 12 of the amount charged It also requires owners and operators of such properties to register their property with the City and remit TOT on a quarterly basis Further they are required to keep and preserve records for a period of three years and the Citv may inspect the records upon request If an owner or operator fails to remit TOT as required the Gity may mpose interest and penalties on the amount owed The City has 6 properties registered as hotels or motels that remit TOT on a quarterly basis The annual revenue received from the 6 properties is approximately 1 million a year The City s independent auditors performed an audit of the 6 properties in 2008 and is confident that these properties are accurately remitting TOT Page 1 of 4 Agenda Itern C
8 In 2009 the City began enforcing the collection of TOT on the short term rental of private homes Prior to 2009 the City did not enforce MMC Chapter 324 and collect TOT on the short term rental of private homes even though it was authorized to do so A short term rental is defined in MMC Chapter 324 as any structure or any portion of any structure which is occupied or intended or designed for occupancy by transients for dwelling lodging or sleeping purposes and includes any hotel inn touris horne or house motel studio hotel bachelor hotel lodging house rooming house apartment house rental unit dormitory public or private club mobilehome or house trailer at a fixed location or other similar structure or portion thereof and shall further include any trailer court camp park or lot where trailer spaces or combinations of such spaces and trailers including mobilehomes are occupied or intended or designed for occupancy by transients for dwelling lodging or sleeping purposes Currently there are 53 residential homes registered with the City that remit TOT on a regular basis The annual revenue received from the private properties is approximately a year The City has worked to ensure that property owners in the City are aware of MMC Chapter 324 and that TOT must be paid on private short term rentals The City has repeatedly placed ads in local papers sent direct mailings and regularly details the obligation in the City s quarterly newsletter that is delivered to all properties in the City The City has also received dozens of complaints over the past two years regarding the short term rentals of private homes and has attempted to follow up with each complaint to ensure proper collection of TOT Despite the City s efforts to inform property owners about MMC Chapter324 and its registration and remittance requirements many properties still do not comply This results in the potential loss of significant funds due to the City and is unfair to the owners and operators who collect and remit the TQT due The majority of short term private rentals are advertised on the internet There are dozens of vacation rental websites that advertise properties in Malibu for short term rental Information on the websites includes photos reviews rental rates and the general location of properties Staff has attempted to identify all properties that are advertised for short term rental in the City however additional information is needed to fairl and uniformly enforce MMC Chapter 324 such as the exact addresses of rental properties and the exact dates when properties have been rented Approximately 100 to 300 individual private properties available for short term rental are actively being advertised on the internet which greatly exceeds the number of properties that have registered as required by MMC Chapter 324 Staff recommends authorizing the Mayor to issue subpoenas as needed to investigate and obtain compliance with MMC Chapter34 This includes serving subpoenas on 1 websites that have active listings for short term rentals in Malibu and 2 property owners or operators who are suspected of not paying the TOT due or who have not voluntarily produced the records needed by staff The City will use these subpoenas to determine the extent of noncompliance with MMC Chapter 324 and the details of the TOT revenue that the City has not collected It is anticipated that these subpoenas will Page 2 of 4 eqget da Iter 6e
9 reveal signi cant TOT revenue that has not been collected Without these subpoenas the City will be severely limited in its ability to investigate and obtain compliance with MMC Chapter 324 The City has identified the following websites that are advertising short term private rentals in Malibu 4malibu com adventurepads corn Airbnb com alwaysonvacation com bbonline com beachhornes net beachhouse com beach houserentals com bestmalibuhouse com booking com boutique homes com bringfido com carefreelifestyle com choice1 com craigslisf org cyberrentals com dreamvr com dwellable com exitrealitybythesea com exploremalibu com flipkey com forrent com gogobot com greatrentals com homeaway com homes com invacationrentals com itrip net jetliving com jetluxuryresorts corn livingmalibu com malibu flipkey com malibu patch com malibu5 com malibubeachhouseforrent com Page 3 of 4 Agenda Item6B
10 malibubeachrentalproperties com maibuestatesrentals com rnalibuoceanfrontrental com maliburentais com malibu rentals corrt maliburentalsnow webs com malburentalsonline com maliburents com maliburoadbeachhouse com paradisehunter com priveluxurentals com rentbits com roomorama com scenicrentals com selectiveretreats com stayathesea com surfbreakrentals com tripadvisor com vacationhomerentals com vacationrentaldirect com vacationrentalpeople com vacationrentals beachlive com vacationrentals com vacationrentals411 com vacationrentalsinmalibu com vacationrentseekers com vamoose com villamallibuliving com vrbo com Upon consensus by the Council subpoenas similar to the attached will be served as needed to investigate and obtain compliance with MMC Chapter 324 ATTACHMENTS Malibu Civil Subpoena Page 4 of 4 Agenda Item6B
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