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Are You Ready for Your Resident to Be Your Business Partner?


New Airbnb Program to Facilitate Short-Term Sublet

WASHINGTON, D.C. – Airbnb recently announced a program to expand the company’s home share platform to include rental housing.  Once relegated to owner-occupied units, Airbnb’s “Friendly Buildings Program” creates an opportunity for residents in rental housing to formally participate in the shared economy – albeit with the consent of the property owner.

Airbnb’s program is essentially a short-term sublet, which without prior authorization is a violation of most standard lease agreements.  Before this program, resident participation and listing of the unit with the home share company has largely operated outside of the property owner’s consent.  The program attempts to expand and normalize the landlord/tenant relationship by allowing a resident to monetize their lease by renting out space to a guest.

According to Airbnb’s website, aside from listing the available unit, the program would provide:

  • An addendum to the standard lease or building rules
  • A profit-sharing model between property owner and resident
  • The requirement of mutual consent between the property owner and resident on these and other rules

While the home share company attempts to alleviate the concerns that most property owners would have, there are still a lot of unknowns.  Some of the applicable laws and other business considerations include, but are not limited, to:

State and Local Laws

  • •Tenancy – How many consecutive days can a guest stay before being recognized as a legal tenant?
  • Zoning, Administrative and Community Codes – Do you have a handle on the applicable laws that govern residences, hoteling and businesses?  Often this can vary from city to city.
  • Hotel/Business Fees and Taxes – Like zoning, administrative and community codes above, there are corollary fees that vary from city to city.
  • Disability Access – While older buildings may be grandfathered from certain residential ADA requirements, a change in use may necessitate updating ADA and other codes requirements to satisfy access and safety considerations.

Business Considerations

  • Liability – Who bears the greater liability? The property owner who allows for this use or the resident?
  • Resident Safety – Lease holders go through a level of screening to establish tenancy.  Is it reasonable that they would expect their neighbors to go through the same screening whether they are long-term or short-term residents?
  • Property Damage – If a guest breaks the TV, sink, or puts a hole in the wall, who is responsible?  Typically it is the resident named on the lease.  However, the addition of a party, with the consent of the property owner, could cloud liability and the property owner’s ability to recover from the leaseholder.
  • Insurance – Is the property insured for this kind of use?  Is the resident insured against the actions of another?
  • Wear and Tear – Are community amenities able to handle the wear associated with the increased frequency of use?  Are communities staffed for the upkeep?
  • Desirability – Do long-term residents want to live an environment with short-term guests?
  • Social Media – Finally, Airbnb locations success or failure hinge on reviews and social media ratings.  Are you prepared to have a bad rating affect the image of your rental units?

While the home sharing concept is still in its infancy, many of these concerns will undoubtedly play out.  NAA will continue to monitor the impact, both positive and negative, to the operation of rental housing.

Fred Tayco