Landlords Beware of AirBnb (What You Need To Know)

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AirBnb is well-loved and for good reason: it connects property owners to short-term renters. Essentially, the property owner just lists his or her property on the AirBnb website and attracts short-term renters. However, this inexpensive and convenient method of renting out properties can become a nuisance for landlords.

In today’s rental market (especially in high rent areas) many landlords are discovering that their tenants are listing their property on AirBnb to subsidize their monthly rent. What a lot of landlords are unaware of are the legal and potential liability problems that may occur if their tenants are doing this. This article seeks to explain some of these problems as well as how to address this problem should the landlord suspect his/her tenants are using AirBnb.

 

  1. LANDLORDS MAY BE LIABLE FOR ACTIONS OF TENANTS AND AIRBNB TENANTS

In a typical rental situation, the landlord rents to the tenant. There is a contractual relationship created between the landlord and the tenant where a written lease typically explains the rights and obligations of both the landlord and tenant. However, when a tenant rents out through AirBnb to another “sub-tenant” the relationship between the landlord and this “sub-tenant” is unclear, which is why this scenario is dangerous.

Hypothetically, if the tenant temporarily rents through AirBnb to a person who turns out to be a criminal and commits a crime in the unit, the landlord now may be on the hook for any liabilities that may result (not to mention the unit is now a crime scene which can affect future rent). Another more common scenario is if the tenant rents to a “sub-tenant” and the “sub-tenant” gets injured in the unit. The landlord is now potentially liable for the injuries that the “sub-tenant” sustained in the unit.

The key issue here is not whether or not the landlord is actually legally liable, but rather protecting yourself from even being in that position. When a tenant uses AirBnb to rent to “sub-tenants” it takes away from the landlord’s control of who uses the property (these “sub-tenants” could smoke or use drugs in the unit without the tenant’s knowledge or the landlord’s knowledge), thus creating a dangerous scenario. In other words, you don’t want to put yourself in that position.

 

  1. HOA MAY FORBID SHORT TERM RENTALS AND/OR PENALIZE LANDLORD

Homeowners Associations around the country have begun seeing the dangers of AirBnb and have passed regulations to prevent occupants of properties from using AirBnb. Imagine an apartment complex in downtown San Diego that requires a code to enter through the gate. If every AirBnb occupant knows the code to enter the gate, this creates a significant security concern for the entire complex.

Typically, HOAs pass regulations preventing homeowners from renting out the unit for less than 30 days. This eliminates the possibility of AirBnb. Included with the regulations are possible assessment of penalties against the homeowners if  HOA discovers the unit is being used as an AirBnb rental. What this all means is that if a property owner does not know their tenant is using AirBnb, the landlord could be on the hook for assessed penalties because their tenant is using AirBnb.

All and all, do not get caught in this situation.

 

  1. WHAT TO DO IF YOU SUSPECT A TENANT IS USING AIRBNB

The first question is always “How do I know if my tenant is using AirBnb?” AirBnb is public. Anyone can go to their website to search for potential short-term rentals. This is the first step to discovering whether or not your tenant is advertising the property on AirBnb. Do a quick search to confirm your suspicion.

Second step is to look through the lease to see if the lease addresses this type of scenario. Unfortunately, a lot of the “template” leases do not include a provision that specifically prohibits renting the property on AirBnb. However, leases typically have a provision that prohibits “subletting” or a provision that says tenants must comply with HOA regulations (whether or not using AirBnb qualifies as subletting is open to debate). If there are these provisions or regulations, quickly inform your tenants that they are in violation of the lease agreement (I’d also recommend giving a 3-day Notice To Cure).

Unfortunately, a lot of leases and HOAs do not have regulations or provisions preventing AirBnb rentals. If you discover your tenant is using AirBnb, but are unable to prevent it, make sure the next time the lease comes up for renewal to draft a new lease agreement that includes an addendum prohibiting the use of AirBnb. It’s best to address this issue sooner rather than later. This is your property; make sure you know who’s living in it.


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Eric Ching

Eric Ching, Esq. - Real Estate Attorney

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