How to deal with wrongful Airbnb subletting

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Mark Tschetter
Managing partner, Tschetter Hamrick Sulzer, PC, and Colorado counsel to the National Apartment Association, Denver

Valued at over $20 billion, Airbnb is the Uber of rentals. Through the Airbnb website, people can rent rooms, apartments and homes. Over a million rentals are listed on the website for places all over the world. Hundreds of Denver rentals, including apartments, are listed on the website and more are being added everyday. A quick search of Airbnb reveals that tenants at multiple apartment communities are offering their apartments for rent. If your tenants are renting your units on Airbnb, this is a clear breach of their lease.

Fortunately, dealing with Airbnb related lease violations is not difficult. If you suspect that your tenants are renting their apartment, the first step is to conduct a search of the Airbnb website.

Properties are not listed by name or address, but enough information is provided for you to easily determine whether your rental is being sublet. The general location (city or area) of the rental is provided. The location information allows you to quickly determine if you have a problem.

If Airbnb units are offered in your area, you’ll need to look at the specific rentals offered. When you look at an individual rental, multiple pictures of a unit are displayed. Individual listings also provide the first name of the Airbnb host – your tenant who is wrongfully subletting your unit. Thus, if a host you’re renting to lists pictures of your unit, your tenant is wrongfully subleasing your unit on Airbnb.

Most leases provide that a tenant may have guests for a certain number of days before the guest is considered to be an unauthorized occupant. A guest is a person who is invited to visit your home without paying compensation. Airbnb renters are not guests. Airbnb renters are unauthorized occupants or subtenants paying rent to your tenant. Thus, despite what your tenant may argue, Airbnb tenants are not allowed under a lease provision that allows your tenant to have guests for a limited number of days.

Further, you don’t have to wait until an Airbnb tenant has exceeded the number of guest days in your lease before you can take enforcement action against your tenant.

If one of your tenants is wrongfully offering your unit for rent, you can take immediate action. When your tenant offers your unit on Airbnb, the tenant likely has breached several lease covenants.

Specifically, the tenant has breached most leases by running a business out of the unit, allowing unauthorized occupants and, certainly, by subletting the unit. When a tenant breaches a nonmonetary covenant, your remedy is to serve the tenant with a Demand for Compliance or Possession, i.e., stop offering the unit for rent on Airbnb or surrender possession of the unit.

Remember, in a compliance case, you have to prove breach, that demand was made and that the breach continued after the demand expired. Compliance-related evictions, such as a typical unauthorized occupant case, can be difficult to prove and can turn into time-draining affairs in court. Fortunately, an Airbnb violation case is the easiest unauthorized occupant compliance case to prove.

When you determine that your tenant is wrongfully subletting, simply take a screen shot or print all relevant screens from the website. You now have the information you need to prove the initial breach. The second element of proof is service of the Demand for Compliance or Possession, which should be no problem. The third element of proof is that you must establish that the tenant continued to breach – continued to offer the unit on Airbnb after three days, not including the day you served the notice. Again, no problem. If the tenant continues to list the unit on the website, after the demand has expired, just take or print additional screen shots.

If your tenant complies with the Demand for Compliance or Possession within three days by removing the listing from Airbnb, you cannot move forward with an eviction. However, you should monitor Airbnb over the next couple months to see if the tenant relists the unit. If the tenant does put the unit back on Airbnb, you could serve a Notice to Quit for a Repeat Violation.

Finally, you could specifically address the issue in your lease – tenant shall not list the unit on Airbnb. However, in most cases, this is not necessary because most leases have strong prohibitions against unauthorized occupants and subletting. If you do have a strong prohibition against subletting and unauthorized occupants, the potential benefit of a specific Airbnb lease provision would be to avoid the entire Airbnb situation from the beginning.

Since tenants obviously do things in violation of lease provisions anyway, to maximize the effect of an Airbnb lease provision, your leasing agent should specifically point out the provision when the tenant executes the lease.

Featured in the May 2016 issue of Multifamily Properties Quarterly.

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