Carmel files suit against Pleasanton couple for illegal short-term rental.

If anyone is illegally renting out a home as a short-term rental in the city of Carmel, beware. That next guest could be part of an undercover sting operation.

One Pleasanton couple that owns a house on Guadalupe between Third and Fourth found that out the hard way.

They’re now facing a lawsuit filed by Carmel in Monterey Superior Court on June 6. The suit seeks a permanent injunction against further short-term rentals, with the threat of fines and even jail time.

“I wanted you to know that we are dead serious about what we are doing,” Carmel’s city attorney, Don Freeman, told the City Council the same day the suit was filed.

The two-bedroom, two-bathroom home owned by Stoffer Jozef and Anna De Pasquale Wagelaar as part of a trust is advertised on VRBO as a “Dream Vacation in Your Own Little Dutch Casetta.”

The house rents out for around $300 a night, and as of June 21 has 31 5-star reviews from previous guests. One guest, Ben L. from San Francisco, states his family stayed there six Thanksgiving weekends in a row as of 2015.

Carmel prohibits any rentals shorter than 30 days in the city’s residential zones.

The Wagelaars could not be reached for comment. A phone number provided to the city last year is no longer in service. They did not respond to an email.

Court documents detail how the city attempted to contact the Wagelaars starting in December 2015 to inform them of the ordinance and telling them to stop using the house as a short-term rental. An initial notice of violation from a contract code compliance officer went unanswered.

Another notice was sent on April 30, 2016, and on May 9, Jozef Wagelaar acknowledged receipt of the notice. The couple continued to rent out the house for less than 30 days at a time, however, according to the contractors working on behalf of the city.

In March of this year the contractors commenced a sting operation against the homeowners, something Freeman said is possibly the first of its kind by any city in California.

A contractor contacted the Wagelaars via VRBO, posing as two different men who were part of a group of friends coming to Carmel between June 3 and June 12. The reservations were made and a deposit was sent to the owners via PayPal.

Once the deposit was accepted, the owners sent the contractor directions to the home and a set of instructions: things like where to put the trash, turning down the lights and the heater, and making sure the barbecue is turned off.

“Please let me know that you got there ok. Thank you. Have a good time,” Jozef, who goes by Joe, writes at the bottom of the emailed instructions included in court documents. 

The lawsuit states that the Wagelaars “have continually violated Carmel-by-the-Sea City Ordinance (89-17), despite numerous warnings and admonitions,” and later states, they “have displayed their contempt for the law and their intention to violate (the ordinance) to the detriment of the community and citizens of Carmel-by-the-Sea.”

The city asks the court for a permanent injunction against any short-term rentals of the home, and asks for the owners to be fined an amount to be determined at the time of trial for each violation of the ordinance.

According to that ordinance, those found in violation could face fines of anywhere up to $1,000 per infraction—each day of rentals counts as an infraction—and up to six months in jail.

Putting people in jail isn't the city's goal, Freeman said. He wants the city "to be made whole," by recouping its costs.

The city is seeking all of the transient occupancy taxes the owners could have collected, plus penalties, as well as all investigative costs, staff time, and all legal and court expenses.

“We’re hoping to get the word out to people that we are serious about it, and it can be very expensive if you do not prevail in the litigation,” Freeman said.

In another possible first for Carmel, the council voted unanimously June 6 to issue a legislative subpoena to VRBO, owned by HomeAway, Inc., based in Texas. Freeman said it’s an unusual move for a city council to issue subpoenas, but California law supports the action.

The company is now on notice to either send the city all records it may have regarding the Dutch Casetta, or appear before the council with the records at the Sept. 5 meeting.

In the meantime, the Dutch Casetta is still available for booking on VRBO—for a minimum 30-night stay.