On April 5th 2019, Diana Hayek, a persistent and flagrant violator of the City’s Home-Sharing laws, was convicted of five separate criminal misdemeanors consisting of: one count of operating an unlawful business in the City, two counts of violating the City’s Home-Sharing Ordinance, and two counts of failing to comply with City administrative citations. These convictions were a result of a multi-year investigation undertaken by the City’s Vacation Rental Enforcement Task Force, a unit of the City’s Code Enforcement Division trained to target illegal vacation rental businesses operating in Santa Monica.

“The City of Santa Monica has consistently dedicated policies and resources toward producing, protecting, and preserving housing in our community,” said Chief Deputy City Attorney Yibin Shen. “These convictions represent just outcomes that affirm these important legislative goals.”

The Code Enforcement Task Force began investigating Hayek’s unlawful short-term rental activities in 2016. The investigation included substantial witness interviews, site visits, sting operations, and search warrants. The investigation found that Hayek removed at least 13 housing units from the permanent rental housing market and used them for her unlawful vacation rental business. Officers attempted to gain compliance first through education and then with administrative citations. When Hayek persistently refused to comply, on December 15, 2017, the Task Force referred the case to the City Attorney’s Office for criminal prosecution. 

On April 5, 2019, the day before trial, Hayek entered into a plea agreement with City prosecutors where she accepted responsibility for all 23 counts of charged violations and received convictions for five separate criminal misdemeanors. The five convictions are as follows: one count of operating an unlawful business in the City in violation of SMMC § 6.04.020; two counts of engaging in unlawful vacation rental activities in violation of SMMC § 6.20.030, and two counts of failing to comply with City administrative citations in violation of SMMC § 1.09.160. Ms. Hayek was placed on four years of probation with the following conditions:

1.     pay restitution to the City of Santa Monica in the amount of $2,118 in investigative costs

2.     pay more than $5,000 dollars in criminal fines and statutory penalty assessments

3.     pay approximately $9,000 in administrative citation fines

4.     comply with all laws, including the City’s Home-Sharing Ordinance’s prohibition against hosting, facilitating, aiding, or advertising a vacation rental in the City

5.     be subject to 30 days of county jail or 60 days of court supervised community service for any future violation of the City’s Home-Sharing Ordinance

“We are committed to the complex enforcement efforts required to ensure compliance with Santa Monica’s Home-Sharing Ordinance,” said Code Enforcement Manager Sharon Guidry. “Through this case, 13 units will be returned to the housing market. That’s a win for residents and those looking to call Santa Monica home.”

After maintaining a multi-decade prohibition against short-term rentals in residential districts, in 2015, the City eased this prohibition by authorizing a form of short-term rentals known as Home-Sharing, wherein a resident is free to host visitors for compensation for a period of less than 31 days, as long as the resident and visitor are both present in the home. Un-hosted short-term rentals of residential housing, known as Vacation Rentals, remain unlawful in Santa Monica. This landmark legislation struck an important balance by enabling current and prospective residents to supplement income through home-sharing to meet increased rents and housing prices, while ensuring that Santa Monica’s housing units, and particularly affordable units, would not be surreptitiously or openly converted into de facto hotels.

For more information on the City’s Home-Sharing Ordinance or to apply for a Home-Sharing License, visit www.smgov.net/homeshare.

To report an illegal vacation rental business, contact Code Enforcement at (310) 458-4984.

Submitted by Constance Farrell, Public Information Officer

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