Legal Scoop On Airbnb And Short Term Rental Agreements
By DANIEL BORNSTEIN, ESQ.
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Our office has been busy with a brisk number of violations relating to subletting and short-term rental rules and clearly, Airbnb is the biggest actor. Everything that glitters isn’t gold, and while we understand the lure of extra rental income, it’s important to temper the exuberance of a new income stream with the fact that many of our clients are staring down the barrel of hefty fines for breaking short-term rental laws.
The modern-day iteration of the temporary flop was at first laissez faire and at Bornstein Law, we predicted very early on that enforcement of these short-term rental agreements would be untenable. The San Francisco Planning Board was largely impotent in providing order when this phenomena first appeared, but the days of the Wild West are over.
The city is cracking down, becoming much more proactive in its enforcement of short-term rental agreements. These enforcement measures are on the heels of Airbnb litigation that culminated in a settlement which commits the leader in short-term rentals to be more transparent about its hosts and not turn a blind eye to regulations. While the law has always lagged technology, the gap has significantly narrowed for Airbnb, not only on its home turf of San Francisco, but in a growing number of additional lawsuits we pointed out in this article.
If you are thinking about renting out your place, it’s important to know what you are getting into before you hand over the keys. If you casually enter into one of these arrangements without formalized documentation and expectations, you are exposing yourself to a wide range of consequences and liabilities. Don’t take the check to the bank before you consult with a legal team that knows the rules and regulations and can help you cover your bacon.
Should you be on the fence and curious if short-term rentals are right for you, it’s important to keep a finger on the bottom line. With rising annual mortgage costs, you may or may not get a good return and even potentially lose money. Before renting your spare bedroom, consult with Bornstein Law and we can give you a 360 view to evaluate your options and weigh the risks and rewards.
At bare minimum, to have a legal short-term rental, you must be a permanent resident of the unit you are looking to rent. You must also register as a business by obtaining a Business Registration Certificate for your property from the Office of the Treasurer & Tax Collector, a prerequisite to registering with the Office of Short-Term Rentals. Register here.
The process doesn’t end there. You must also become a certified host and the certificate number must be posted on all listings advertising your short term rental and once all of your ducks are in a row, you can only rent 90 “unhosted” nights per year, the vernacular that describes rental nights when you are not present in your unit during your guests’ stay. Given the red tape and multiple shades of grey, it’s easy to see why an attorney consultation is in order before you go down this path.
Let’s pivot to another scenario that crosses our desk - tenants subletting their abodes in the shadows.
Not uncommonly, we see property owners that discover that their tenants are engaging in short-term rentals. The laws are not murky on this – if you are a property owner that suspects a tenant is subletting your property, it is a violation of the lease and you are entitled to put a halt to the hybrid rental. You need to know what is going on with your unit and if you don’t, you can face substantial penalties in a climate where the City is aggressively clamping down on violations. Tenancy is not a game of musical chairs, folks, but Bornstein Law can help restore order to a situation where a tenant is breaching their contract with you.
In parting thoughts, we’d like to say that we are not for or against Airbnb-type agreements. There are many sides of the coin and every circumstance is different. No matter where you fall in the pendulum, this topic should not be approached foolhardy. We’ve carved out a niche in this highly specialized facet of law and gladly help property owners protect their rights in the post-Internet era of short term rentals.
As the founding attorney of Bornstein Law, Broker of Record for Bay Property Group and expert witness, Daniel Bornstein is a foremost and well-respected expert in landlord-tenant disputes and other property management issues with over 23 years of experience in handling real estate and civil litigation related disputes in and throughout the Bay Area. More than a litigator, Daniel manages rental properties, assists in completing real estate transactions and is well known for his educational seminars. He is always eager to answer questions and engage with Bay Area landlords, property owners and real estate professionals. Email him today.
