Waltham, MA (PRWEB) August 21, 2014
In recent years AirBnB has become a popular outlet for renting one’s home or apartment to tourists or business travelers as a means of making additional income. The concept is relatively simple. A potential renter posts when a property would be available to a potential renter.
Essentially AirBnB acts as a “hub” that allows renters to meet “hosts” and make arrangements for a single night or longer.
While at the surface the arrangement that AirBnB allows appears relatively simple but there is the potential for a significant downside to the relationship, one that could have severe financial implications.
A recent event in Palm Springs highlights the “risk” of using AirBnB.
From theDesertSun.com (July 23, 14):
A San Francisco woman who listed her North Palm Springs vacation home on Airbnb has been faced with a tenant who did not pay a portion of the rent and refuses to leave. http://www.desertsun.com/story/news/local/2014/07/23/san-francisco-north-palm-springs-airbnb/13078743/
It is a cautionary tale.
Adam Almeida, President and CEO of TenantScreeningUSA.com states: “California law maintains that a rental longer than 30 days may be considered a rental status and, subsequently, held under different rules for eviction than those of a hotel.”
The rental arrangement listed above extended beyond 30 days and the process of eviction must be invoked in order to forcibly remove the tenant/renter.
Eviction is neither fast nor cheap: it could take as much as half a year and cost around $5,000 in lawyer's fees. http://la.curbed.com/archives/2014/07/nightmare_airbnb_guest_in_palm_springs_refuses_to_leave.php
Generally vacation rental or short-term rentals last for one or two weeks, but once a landlord or property owner begins to move into the 30 day plus rental special care must be taken.
Almeida states: “Property owners that lease their property for longer than 30 days must take precautions in order to avoid a potential eviction process. Careful steps one might take for a long-term rental must be taken for a 30 day rental. Understanding your tenant both conventionally and legally is critical, regardless of the term of the lease.”
AirBnb continues to gain in popularity, especially in large cities such as San Francisco, where the cost of a hotel or related accommodations are high. Large rental properties are being liquidated of renters via the Ellis Act.
The Ellis Act: “…is a state law which says that landlords have the unconditional right to evict tenants to "go out of business." For an Ellis eviction, the landlord must remove all of the units in the building from the rental market, i.e., the landlord must evict all the tenants and cannot single out one tenant (with low rent) and/or remove just one unit from the rental market. http://www.sftu.org/ellis.html
The law appears to be gray in terms of subsequently renting those units via AirBnB and evictees and neighbors of these type of housing arrangements are fighting back.
From KCBS.com (July 29, 14):
Demonstrators in San Francisco have posted neon green warning signs on the outside of some apartments where director of the Tenants Union, Ted Gullicksen says people have been evicted under the Ellis Act and landlords are now renting apartments through websites like Airbnb and VRBO. http://sanfrancisco.cbslocal.com/2014/07/29/tenants-rights-group-protests-against-illegal-airbnb-vrbo-share-rentals-in-san-franciscos-north-beach-sharing-economy/
Whether or not the conversion of regular rental buildings to ownership via the Ellis Act or similar legal maneuvers and their subsequent use as AirBnb gray area rental remains to be seen, but the rise of AirBnb and the controversy that follows is a cautionary tale for property owners renting short-term.
Almeida states: “It is incumbent on landlords of properties large and small; renting out for long or short term, to know their renters. The use of tenant screening is a valuable tool that can be used to make an informed decision, but, more importantly, a property owner must know the laws of tenancy in their state and working with a tenant screening agency is a best practice.”
TenantScreeningUSA.com is a third-party tenant screening agency that can assist property owners large and small with tenant background checks as well as remaining compliant with all laws and regulations governing tenant screening. It is incumbent on the landlord or property owner to understand all local and state tenancy laws.