Airbnb logo. Photo: Kaspars Grinvalds/Shutterstock.com.

A legal battle between Airbnb Inc. and Miami Beach over government oversight reached a conclusion with a settlement agreement.

A federal lawsuit brought by the property rental company against the city was dismissed from the Southern District of Florida after mediation proceedings produced a settlement between the parties. The suit was filed in January and contended Miami Beach’s rules and regulations regarding short-term rentals abridged Airbnb’s rights and would hobble the company’s ability to conduct business.

The complaint took specific issue with a Miami Beach ordinance, which required companies such as Airbnb to display a city business tax receipt and resort tax certification alongside listings. Anyone seeking to lease out a property is required by law to obtain these registration numbers in order to make short-term rental listings in the city. According to the suit, the provision of Miami Beach’s law requiring Airbnb to monitor and verify that each listing included these licenses infringed on federal protections concerning material generated by third parties.

“The burden to Airbnb of reviewing third-party content to alter, prohibit or remove listings would not be measured solely by the static number of listings at a single point in time, but would be an ongoing and expanding burden,” the suit said, noting “hosts can add new listings, change the status of listings, and deactivate listings” at any given moment. “ Airbnb then, too, would have to monitor for every change constantly,” the suit said.

The lawsuit asserted Miami Beach’s ordinance “would cause a significant disruption to Airbnb’s operations and impose substantial personnel and other costs” on the company.

Read the stipulations of the settlement:

The settlement has amended the provisions of Miami Beach’s laws surrounding short-term rentals. A statement on the settlement by Airbnb noted the responsibility for verifying the validity of a host’s registration numbers now falls on the city, rather than the company. However, Airbnb must now provide mandatory fields for hosts to input the license numbers required to list their properties for short-term rentals.

Airbnb called the settlement a “win-win breakthrough” for the company and Miami Beach in a statement.

“It is a win for our hosts who will have certainty as to the rules and a win for the city when it comes to having a regulatory framework that will work,” the statement said, noting Airbnb has worked out similar arrangements promoting “fair regulatory frameworks and partnerships” with municipalities around the world. “We look forward to providing the city the tools they will need to support compliance, delivering revenue as part of this agreement and further infusing a positive economic impact for the city and its residents.”

The statement provided by Miami Beach said the city was “victorious” against Airbnb.

“Airbnb, recognizing that they were going to unequivocally lose the federal lawsuit against the City of Miami Beach, agreed to pay the municipality $380,000 for its attorney fees expended in defense of their frivolous federal lawsuit,” the statement said. “Airbnb shall be complying with the requirement of the ordinance mandating the display of the resort tax account and business tax receipt numbers for each individual listing by their hosts within those permitted areas in Miami Beach. Airbnb will be prohibited from displaying any listing that does not have these numbers and will be subject to fines and penalties for failure to comply with the disclosure requirement of the ordinance.”

Although the city claimed the company will be paying for attorney fees as part of the settlement, paragraph 10 of the stipulation of the settlement said “Airbnb hereby agrees to dismiss this action against the city without prejudice and with each party to bear its own attorney’s fees and costs.” The company declined to comment on the discrepancy between the statement and Thursday’s filing.

The stipulation states Airbnb will contribute $380,000 to Miami Beach “which it may use in its discretion, including to educate residents about home-sharing rules and/or for the enforcement” of short-term rental regulations.

“Obviously this was a frivolous lawsuit and it was wise of Airbnb to pay our legal fees as part of its resolution,” Miami Beach Mayor Dan Gelber said in the statement. “They will now have to comply with the city ordinance.”

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