REAL ESTATE TOPICS...Landlords And The Fight With Short-Term Rentals

By  A J Agrawal

Welcome to the sharing economy. After years of corporations dominating markets, people have now found a way to tap into these markets without having to invest millions. One company that helps people make money from the sharing economy is the short-term rentals agency, Airbnb.

Founded in 2008, Airbnb allows people to list their homes as short-term rentals. The concept took off quickly and led the way for other industries such as car sharing (Uber and Lyft). Even Arianna Huffington took to the site as a way to promote her new book The Sleep Revolution.

Despite its success and the love it gets from travelers, there is one group of people who are not impressed - landlords. Residents who live next to short-term rentals have had enough and have been complaining to the person renting the property out (the hosts), many of whom are actually renters themselves. Some properties have turned into party houses which keep neighbors awake. Sometimes renters violate local community rules such as parking; not caring because they will be gone the next day.

While short-term renters are not always bad, it is this select group that has caused a stir in communities. Cities such as Los Angeles have banned short-term rentals, but that has not stopped people from doing it.

“Governments are implementing laws but not fast enough,” says Travis Gooden from StopBNB. “And those with laws still need to have a way to track down who is a host resident.” StopBNB helps track short-term rental listings on websites such as Airbnb, Craigslist, and Flipkey. The website searches property addresses and notifies users as soon as they see the property listed for rent.

Landlords have found a unique way to keep short-term rentals out of their neighborhoods. Many tenants are not aware but a common lease will often contain a “subletting clause,” stating that the renter is not allowed to lease the property to anyone else. According to Gooden, this would be a violation of the lease and wind up getting the renter evicted.

“When you sublet a property in violation of the lease, you essentially become the landlord. However, the property is not yours to rent. The landlord has agreed to rent it to you, but not to anyone else you want. Landlords do not vet short-term renters as they are not aware of them most of the time. It would be similar to loaning your car to a friend who in turn loans it to someone else.”

Landlords are not only enforcing the subletting clauses, but they are also suing for damages. In 2015, a tenant in Midtown, New York was sued by her landlord for $300,000. This was after she was found repeatedly renting out her apartment on Airbnb for $200 per night.

“Landlords are strictly liable for anything that happens on their property,” adds Gooden. “This means that a person who leases a room under a short-term rental agreement could sue the landlord and recover damages if they are injured while on the property.”

Getting sued is not something that a landlord looks forward to which is why so many are trying to keep tenants from entering the Airbnb marketplace. Renting out a property without the landlords permission is a surefire way to get evicted as it costs landlords less than a potential legal claim from a short term renter.

Airbnb is also trying to help neighbors by providing them with a way to file complaints. Its website has a contact form where issues about suspected Airbnb hosts can be filed. This is a great system for Airbnb to reject hosts from using its website, but it does nothing for the landlords who own the properties. StopBNB has found a way to change all of that.

Landlords sign up on StopBNB and enter their property address. The site then monitors Airbnb, Craigslist, Flipkey, HomeAway, and VRBO for listings matching that address. Once it finds a match, the landlord is sent a notification that the property is listed for rent. It monitors these sites continuously so even if the property is not listed now, you will be notified in the future if it is.

“Done properly, short-term rentals have a place,” adds Gooden. “We are not looking to shut down Airbnb. Our goal is simply to help landlords enforce leasing agreements. The goal is to make sure the marketplace is safe and everyone follows the rules.”

It is unlikely that StopBNB will put an end to the sharing economy. Even people in Los Angeles continue to rent out properties despite it being against the law. Hopefully it will help keep subletting out of the hands of those who mess it up for the rest of us.