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Airbnb & Short-Term Rentals

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Airbnb may have won many people’s choice awards, but it hasn’t gotten many points with its hometown. Now, the city seems to have tamed the beast and emerged as the undisputed enforcer of the modern-day iteration of the temporary flop. San Francisco’s newly fanged Office of Short-Term Rentals no longer has to plea with billion-dollar platforms to remove hosts that flout the rules – they merely tell them to remove these bad actors.

In a nanosecond, thousands of straggling, unregistered Airbnb hosts got their listings deactivated, nixing nearly half of Airbnb’s listings overnight. That’s because when the clock struck midnight on Wednesday, January 17, a new law kicked in requiring hosts to register their property went into effect.

In that moment of reckoning, the rules become clearer. A short-term rental host that shows compliance with San Francisco’s laws and earns a license issued by the city is legal, and those who don’t follow the law are illegal and excommunicated – not open for debate or discussion. As part of the long-promised crackdown, 2,000 units were pulled off the site last Tuesday alone, ending an era when not having a license was no bar to ranking in cash.

The data is fresh and we are still analyzing it, but it appears that at least 6,000 short-term rental listings were removed through this process…. For Airbnb alone, around 4,760 listings were removed.”

~ Kevin Guy, director of S.F’s Office of Short Term Rentals

Joe Eskenazi has a riveting behind-the-scenes glance of the final countdown to the Airbnb registration at the Office of Short Term rentals.

San Francisco stands alone in putting such a dent in Airbnb’s listings, but who, exactly, is responsible for this dramatic turnaround? Their capitulation to demands is not owed to Airbnb itself or the city attorney, but to an “only in San Francisco coalition” that united odd bellows to organize, run campaigns, educate, and eventually support the Goliath to quit posting illegal listings, submits this article.

Regardless of the forces behind Airbnb’s about face, Bornstein Law has seen this day long in the making and feel somewhat validated by our predictions very early on in the parade that the law would catch up with technology.

Airbnb wins a lawsuit that threatened its entire business model

In a victory for profiteering renters that improperly sublet their units for extra cash, a federal judge has tossed out a lawsuit that sought to crack down on hosts using the Airbnb website without landlord permission. Denver-based Aimco took the fight to Airbnb in dual lawsuits in Florida and California, claiming that Airbnb was deliberately incentivizing people to break their leases. A judge rejected this argument, ruling that Airbnb was not responsible for any havoc that was wrecked by guests. That according to the Communications Decency Act, a federal law that gives internet companies immunity for content that users or random people post on their sites.

The takeaway for landlords? Don’t wear blinders, and some personal sleuthing may be in order to determine what is going on in their rental units. Owners can and must take corrective action if improper subletting is detected.

If history is any indication, we’re sure that it won’t be too long before Airbnb graces itself in the news again, but you can count on the landlord lawyers of Bornstein Law to help stay in the know.

 

Airbnb’s steely legal team is no stranger to litigation, whether defending an array of lawsuits around the globe or bringing their own fight to municipalities that stand in way of their conquest, including their home turf of San Francisco. After some scrapes and bruises with both wins and losses in their column, the battle-tested leader in short-term rentals just beat a game-changing lawsuit in California that threatened its very business model.

Themselves a goliath with roughly 50,000 properties under its management, Denver-based Aimco brought dual lawsuits in Florida and California, claiming that Airbnb was deliberately incentivizing people to breach their leases. More than just passively providing a platform for property listings, Airbnb is complicit in lease violations as a broker of short-term rental agreements and a processor of payments, was the gist of Aimco’s argument.

After some legal wrangling and gambits that did not prevail, Airbnb said in essence, “it wasn’t me” and cited the Communications Decency Act, a federal law that gives internet companies immunity for content that users or random people post on their sites. The nine-year-old company was not responsible for any havoc that was wrecked by guests, they submitted, and a federal judge agreed.

In tossing out the lawsuit, U.S. District Judge Dolly Gee found that Airbnb is indeed shielded by federal law and is not liable for the content that third-parties post on their website.

“Airbnb hosts — not Airbnb — are responsible for providing the actual listing information… Airbnb ‘merely provide[s] a framework that could be utilized for proper or improper purposes.’”

Aimco spokeswoman Cindy Lempke didn’t couch any words in her response to the ruling.

“Aimco has made the deliberate choice to expressly prohibit short-term rentals to unaccountable Airbnb users who have not undergone our background screening, who cause disruption for our residents, and who are apt to treat our apartments like hotel rooms rather than homes. We will continue to do all we can to stand up for our residents, advocate for our private property rights, and address the upheaval caused by Airbnb.”

If history is any indication, Airbnb’s legal quagmires are far from over, but this does mark a major victory for the company and more ominously, profiteering renters who rely on Airbnb to make some extra cash.

Our takeaway is that landlords should not wear blinders and some personal sleuthing may be necessary for them to ascertain what is going on in their rental units. Leases should be reviewed to ensure subletting restrictions in the modern day era of the temporary flop. If any aberrations are found, they should met with legal vehicles that can end the game of musical chairs.

It’s been said that the Internet is the world’s biggest experiment in anarchy, but with the law catching up with technology, the guidance of an attorney can restore order.

More than a Johnny-come-lately, Bornstein Law has been pioneers in short-term rental laws on Airbnb’s home soil, long before this phenomena reached critical mass.

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.

There’s never a dull moment with Silicon Valley’s most prized unicorn. Airbnb made the national spotlight again, this time for the blatantly racist text message of one of its hosts.

Dyne Suh, a law student from California, tried to book a cabin through Airbnb and minutes after arriving, the host canceled the reservation. “One word says it all. Asian” was the explanation given for the cancellation, which left Suh’s group stranded in a snow storm near Big Bear. Airbnb promptly banned the host and issued a strongly-worded statement condemning the behavior.

For their racial bias, the ex-host will now pay $5,000 and go back to school. They are required to take a college-level Asian American studies course, volunteer at a civil rights organization and participate in a community education panel.

“This is a development in restorative justice, which means that people can make mistakes, people can do bad things, but they’re not irredeemable”

~ Jon Ichinaga, chief counsel of the Department of Fair Employment and Housing

For more background on the story, visit this CNN Article.

While the educational component of the ex-host’s penalty is unprecedented, this is not the first time racial discrimination by Airbnb hosts has been under fire. Watch this video from CBS This Morning which chronicled the endemic problem and Airbnb’s efforts to address the issue head-on in a “zero tolerance” policy.

The most recent story of Dyne Suh’s harrowing experience has some shock value because the offensive statement was so blatant for the world to see, but at Bornstein Law, we must warn Bay Area property owners that 99.9% of housing discrimination lawsuits are due to less obvious forms of discrimination. You do not have to make overt racial slurs in order to be in trouble, folks.

In fact, housing discrimination comes in many unsuspecting, less clear-cut forms. For example, in an earlier post, we explained that landlords and property managers must exercise caution in using criminal background screening when selecting tenants. We’ve also pointed out that service animals are not considered pets and so denying housing to a visually impaired person because they have a service dog, for example, can give rise to a discrimination action.

Under California law, a landlord cannot refuse to rent to a tenant, or engage in any other type of discrimination, on the basis of group characteristics specified by law that are not closely related to the landlord’s business needs. Race and religion are examples of “group characteristics”, but it doesn’t end there. Ancestry, childbirth, sexual orientation, marital status, source of income, disability or medical conditions are some of the many dizzying factors that landlords need to consider.

You do not need an attorney to tell you it’s not ok to send a racist text message to a would-be tenant, but for other nuanced areas, Bornstein Law can help you understand the rules and regulations related to housing discrimination.

More than ever, the law supports strict enforcement of any actions that suggest discriminatory intent with real estate activity, making it imperative for property owners to take notice. Stay tuned for future posts that address these and many other weighty issues affecting Bay Area landlords today, or subscribe to get the latest updates delivered to your inbox.

As pioneers in the ever-evolving laws relating to short term rental agreements, we were intrigued by the new role Danny Glover was cast into. It’s not a sequel to Lethal Weapon, but a major role in the PR campaign of Airbnb. The short term rental Goliath needs some help, for sure.

Airbnb has taken a backlash lately over diversity issues, and it wasn’t so long ago that it percolated to the national news when a host sent a text message to a prospective guest denying access to her rental because she was Asian, a story we chimed in on here.

The actor, film director, and political activist seems to be the perfect figurehead to champion a culture of safety and diversity. Known not only for his world-renowned films and television programs, Danny Glover is also for “progressiveness throughout America and the world knows Mr. Glover as a steadfast advocate for social justice”, according to Janave Ingram, director of partnerships for Airbnb.