The legal saga of Airbnb and other short-term rental platforms has been anything but transitory, but it seems that things are settling down and order restored.

September 14 sets a milestone in the storied history of Airbnb with its hometown city. That was the drop-dead deadline for Airbnb and other modern-day iterations of the temporary flop to bring their platforms up to compliance with the San Francisco Office of Short Term Rentals (OSTR). And this time, the City was not kidding.

Largely shrugged off at the time, in 2015 the Short-Term Rental Ordinance was enacted (Chapter 41A of the San Francisco Administrative Code). The ordinance legalized short-term rental activity for hosts within San Francisco that are permanent residents of their dwelling unit. The hosts were to obtain a business registration and jump through some administrative hoops, but few did.

When it became clear that the honor system wasn’t working, The Board of Supervisors stepped in August 2016, adding several requirements for hosting platforms that provide booking services. Some key demands:

  • Platforms must verify that any residential unit offered for short-term rental is lawfully registered with OSTR before the platform may provide, or collect a fee for, booking services for that unit. The Guidance attached to this letter details how to comply with this requirement.
  • Platforms must submit a monthly affidavit to OSTR affirming that they have exercised reasonable care to verify that hosts utilizing their service are lawfully registered with OSTR.
  • Platforms must maintain business records for no less than the prior three years for each of their hosts and short-term rental transactions and must provide this information to OSTR upon request.

Airbnb and HomeAway responded with a lawsuit. Fast forward to a settlement in which the hosting platforms agreed to more transparency about its hosts. Of course, there were some kinks, but they got ironed out. On July 31, OSTR sent a friendly but stern letter to short-term rental platforms reminding them of their obligations. The OSTR became more than a potted pot – it meant business.

We uploaded the game-changing letter to our website, but warn it’s not an easy read. With the new rules and regulations impacting short-term rental agreements and the City’s newfound ability to enforce them, it is imperative to consult with an attorney to avoid being banned as a host and incur other liabilities that will be much costlier than a weekend stay.

Bornstein Law