If you own or rent property in any major city, you likely have heard of AirBnB. AirBnB is now utilized by over 190 countries. It is considered a way to make easy money by property owners and renters alike, targeting travelers who prefer to stay in someone’s home or rental unit as opposed to a hotel. Beyoncé, for instance, rented a $10,000 a night home in Los Altos Hills, California for the Superbowl. Several months later, Justin Bieber rented the same home.
More than the rich and famous, AirBnB targets budget-conscious travelers. Typically AirBnB offers “more bang for your buck” than hotels in similar areas. Where renters or homeowners stay in the unit with AirBnBers, it also offers the added bonus of a local city dweller to recommend restaurants, nearby shopping areas, and tourist attractions.
While AirBnB is internationally popular, many landlords worldwide dislike AirBnb when the landlords’ tenants sublease their property to consumers.
What is Airbnb and How Does it Work?
Simply put, Airbnb is a room letting website. It allows people to list, find and rent lodging from all over the world, including popular destinations such as Paris, London, Berlin, and state side in cities such as San Diego, New York, and Miami. It is privately owned and is reportedly worth $25 billion. The primary source of Airbnb’s revenue comes from service fees from bookings.
Why Do Landlords Oppose Their Tenants Utilizing AirBnB?
Landlords from many cities are against AirBnB. Their opposition depends on the local laws and regulations.
First, AirBnb rental by tenants creates a residency that can lead to a more long-term tenancy, which the landlord’s mortgage lender typically forbids and which can constitute a material breach of their mortgage contract. Second, it may qualify as a House in Multiple Occupancy, which could require the landlord to acquire a specific business license and additional liability insurance.
In San Francisco, most tenants are covered by rent control such that the rent can only be raised by a certain amount each year. Let’s say a tenant has been renting a one bedroom, one bathroom unit since 1980 and pays $800 a month due to rent control. If the tenant is able to get $500 a night the four days in the summer, the tenant stands to make $2,000 on the transaction, pocketing $1,200 after she pays her monthly rent. Landlords believe this type of arrangement unfairly enriches the tenant.
Can Landlords Limit AirBnB?
The short answer is it depends. Different cities have different regulations. In most cities, a landlord can include a “no subletting” clause limiting a tenant’s ability to utilize AirBnB. A “no subletting” clause dictates that the tenant cannot rent out all or part of the apartment for any length of time. If you violate the provision, your landlord can evict you.
However, in Victoria, Australia, a court ruled that tenants cannot be evicted for violating the subletting clause. In a recent case, a tenant argued that AirBnB guests do not have “exclusive possession” of the rental apartment, or the right to use the premises at the exclusion of all others, including the landlord herself. The Victorian Civil and Administrative Tribunal concluded that AirBnB guests cannot be said to have exclusive possession of an AirBnB unit because AirBnB specifically limits possession. The case is the first authoritative case of its kind in the world.
It is important to note that most American jurisdictions do not follow this principle. Instead, they conclude that no subletting clauses can limit a tenant’s use of AirBnB if it is included in the residential lease.