The City of New Orleans recently announced that it would start issuing “Administrative Subpoenas” to enforce the Short Term Rental laws. Up until now, the city has only focused on enforcing the laws in the French Quarter, where short term rentals have been banned since the 1950’s.
But, it appears that the city is going to increase enforcement in areas outside of the historic district, and may use the administrative subpoenas to do so.
What is an Administrative Subpoena?
City ordinances reference Administrative Subpoenas, but only as they relate to short term rentals. The city’s law states:
The city shall have the authority to subpoena information from short term rental hosting platforms. Any such administrative subpoena shall:
- Be submitted in writing by the city attesting that the city has a reasonable belief based on evidence that a short term rental may be in violation of this article or of applicable provisions of the Comprehensive Zoning Ordinance;
- Be sent to the short term rental hosting platforms via regular and certified mail; and
- Be related to a specific investigation by the city relating to a single short term rental that is specifically identified in the subpoena, and alleges the specific violations of this article or of the applicable provisions of the Comprehensive Zoning Ordinance.
The platform shall notify their user of the information requested in the subpoena within ten days of receipt of the subpoena and produce the responsive records within 21 days of providing notice to the user, except to the extent that the user has sought relief in a court of competent jurisdiction.
What, exactly that means, is for right now, anyone’s best guess. Because the law is vague, the mayor’s office, which enforces the law, can interpret that as it sees fit. This could mean that the city could ask for any and all information that a short term rental platform, such as Airbnb or VRBO, has on a specific property.
Whether or not the platform will comply is an entirely separate question, and one that will only be answered if a platform is served with the subpoena.
Can the City issue any other subpoenas?
The short term rental laws are the only place in the city code that specificly mentions an “administrative subpoena.” However, the city also has procedures for issuing subpoenas to investigate the proper collection of sales and use tax. Consider Sec. 150–487:
The director [of the department of finance] or any deputy thereunto authorized by him may by subpoena compel the attendance of witnesses and the production of any books, records, papers, vouchers or accounts of any dealer or of any person whom the director has reason to believe has information pertinent to any matter under investigation by the director at any hearing held pursuant to the provisions of this article.
That’s also very broad. Broken down in laymen’s terms, it means the city can issue a subpoena to anyone that they believe might have information related to the collection of sales and use tax. If you’re a short term rental operator, that could reasonable include you. In that situation, you may be forced to either turn over your books and records, fight the subpoena with a lawyer, or face penalties for not complying.
What is the scope of the subpoenas?
As detailed in the law, the city has very broad scope to request “books and records.” Arguably, this includes bank records, detailed accounts of bookings, communications with guests, etc.
What are the penalties for not complying with a city subpoena?
If a short term rental operator fails to comply with a subpoena, city code allows the city to issue fines that start at $100/day. Those fines escalate with time, and also allow the city to ask a judge to enforce the subpoena.
I’ve received a subpoena, what do I do?!
If you don’t want to comply with the subponea, you’ll need to talk with an attorney. This area of the law is new and developing, so there may not be a clear path to follow yet.