Appeals court says Clark County short-term rental injunction is too broad, opening a path to reopen licensing

What happened

A federal appeals court has ruled that a court order pausing some of Clark County's short-term rental rules goes too far, the Las Vegas Review-Journal reported. The 9th U.S. Circuit Court of Appeals said in a memo last week that the order has essentially wiped out all county regulation of the rentals for nearly a year.

On Wednesday, the appeals court ordered a Nevada judge to narrow the injunction so the county can "stand up a functioning license regime," according to the Review-Journal. The county's licensing system has been closed for much longer than the injunction has been in effect, the newspaper reported.

How the case got here

The lawsuit

A coalition that includes the Greater Las Vegas Short-Term Rental Association and Airbnb sued over the county's rules last year, the Review-Journal reported. The plaintiffs argued that the county did not give property owners a proper way to apply for licenses, and that this led to fines and liens against some properties.

The injunction

District Court Judge Miranda Du granted a preliminary injunction on some of the regulations in December, and Clark County appealed. The appeals court said that issuing an injunction was proper, but wrote that "the injunction's terms are unnecessarily broad." In its view, the order in effect allows anyone in the county to run an unlicensed short-term rental, including people who are not part of the case and people who never applied for a license.

What the appeals court said

Plaintiffs likely to win on due process

The memo said the plaintiffs are "likely to succeed on the merits of their procedural due process claim." The court wrote that they have shown the county interfered with a protected property interest without providing constitutionally sufficient procedures, according to the Review-Journal.

A possible fix for licensing

The appeals court noted that Clark County's attorneys had suggested restarting a licensing process in exchange for a narrower injunction. The memo said a proper injunction must give the plaintiffs a meaningful chance to apply for a license and have applications handled in a reasonable time. As one example, it said the injunction could order the county to reopen its application portal and set a time frame.

The memo also said that if the county truly cannot process applications, the plaintiffs could ask the court to hold the county in contempt or seek other remedies to make sure it follows a narrower order.

How both sides responded

Both Clark County and the rental association, which represents hundreds of homeowners, view the ruling favorably, the Review-Journal reported. In a statement, the county said a narrower injunction will let it enforce its laws against short-term rentals "which disrupt our communities and harm our quality of life."

Association founder Jackie Flores called the ruling a victory. In a written statement, she said "the biggest win" was the court's view that the group is likely to succeed and that property owners have a protected property interest in leasing their homes on a short-term basis.

For more coverage of housing and property issues around the valley, see our real estate section and neighborhood news.

What to watch next

• A county spokesperson said the Clark County Commission is slated to consider an amendment to its short-term rental ordinance, with an agenda item as early as Oct. 20.
• The Nevada judge has been ordered to narrow the injunction, and the new terms have not yet been set.
• Whether the county reopens its short-term rental license application portal, which the appeals court listed as one possible requirement.
• The underlying lawsuit by the rental association and Airbnb continues while the injunction is revised.