Airbnb and Short-Term Rentals: Practical Considerations for Landlords, Tenants, HOAs, and Other Stakeholders

Description

Vacation and other short-term rentals have become increasingly popular as businesses such as Airbnb and HomeAway connect hosts and guests online and provide an accessible platform to enter into short-term rental agreements. Buoyed by a growth rate of over 100% year on year, Airbnb now has over 4 million listings--with the U.S. being its largest market--impacting not only the hospitality industry but also the broader real estate market.

This growth has led to states and cities developing an increasing number of municipal regulations aimed explicitly at reining in the use of short-term rentals. Similarly, homeowners' associations, condo boards, co-op agreements, and other neighborhood organizations often restrict how properties can be used, including the prohibition of short-term renting.

Unlike typical lease agreements, which are more robust, agreements on sites like Airbnb occur after minimal due diligence, creating serious risks for landlords. Liability for short-term rentals usually falls to the owner of the property, even when the landlord has no idea that short-term rentals are occurring. Similarly, neighbors may also have legitimate grievances and claims against an owner when the property is used as a short-term rental. There can also be severe consequences for tenants. A tenant who sublets to Airbnb clients without the landlord's permission may violate the lease with the landlord or the government's rent regulations, which could result in the tenant's eviction.

Listen as our panel of experts in real property transactions discusses practical guidance on how to best address the issues and balance the interests of each party involved.