In 2015, the L.A. Loft Blog began hearing increasing reports of loft renters subletting their units by using AirBNB. This practice seems to be rapidly increasing even though it is generally not legal.
AirBNB, a website that helps property owners connect with travelers and short-term renters who want to rent unique places in the U.S. and around the world, is getting more popular everywhere. Since most condominium homeowners associations in Los Angeles expressly prohibit short-term rentals, and most lease agreements prohibit subletting, it’s probably time for all landlords to give extra written warnings to make it abundantly clear to all tenants not to do any type of subletting such as AirBNB, and to also mention the potential fine (possibly up to $1,500 per day or more) that will be assessed to the property owner by the Homeowner’s Association, and then passed on to the subletting tenant and/or to the short-term rental guest. The City of Los Angeles may also fine the subletting tenant and property owner for not paying hotel taxes.
Renters and landlords who have had a bad experience using AirBNB either as a Host or as a Guest, have shared horror stories on Airbnbhell.com, the website that is dedicated to helping hosts and guests spread the word about the risks and dangers of using AirBNB.
AirbnbHell has published a list of reasons why renters and landlords should not use AirBNB. AirbnbHell says that, at the very least, consumers and property owners should be aware of some serious issues with AirBNB services, and they should also consider other options, including AirBNB competitors.
For potential AirBNB guests (renters):
If any of the guests personal items or cash are stolen (by the host, other guests, or burglars) the guest is 100% out of luck and has no protection from AirBNB.
If there is a foul odor, loud noises, or any other problems with the room that are not easily documented with photos, the guest is out of luck and the guests claim for a refund will be denied.
There is no guarantee how many people might be living in a given home/condo while the guest is there. If there is a shared bathroom the guest might end up sharing it with 1 person, or 20.
A “fully stocked kitchen” means very different things to different people. One pot, 2 dishes and a handful of silverware does not mean that a guest can actually cook a meal there, yet this is not enough evidence to seek a claim for refund
If the guest buys groceries and then another guest or the host uses them or throws them away, the guest is out of luck.
If the host or another guest has a party every night, the complaining guest will have to thoroughly document each incident with video recordings and time stamps to seek any sort of claim or refund. Even then, it will be a battle that may take weeks.
AirBNB charges the guest about 15% on top of what the host actually receives for the reservation. That means that the guest COULD get a reservation for about 15% LESS if the property was booked directly with the host.
If the guest must cancel a reservation at the last minute, the host has the right to keep some or all of the money paid for the entire stay. The guest will not have any ability to write a review of the host if the guest cancels the reservation, even if the guest ends up paying for the entire stay and the host double-books the rental space.
For potential AirBNB host (property owners):
If the guest claims any sort of insect/pest/vermin problem, AirBNB will instantly return 50% of the guests money, even if it’s a year long reservation and the claim is false. AirbnbHell says that this is a common scam tactic.
If the guests steal the property owner’s cash or other difficult-to-prove assets, AirBNB will do nothing.
If the host makes any claim regarding damage to reclaim part or all of the security deposit, AirBNB will make things very difficult by demanding receipts for the hosts original purchase even if it’s furniture that they have owned for 20 years. If the host does not have receipts, they are out of luck, and even if they do, it will take weeks or months to get any resolution.
If the host waits more than 24 hours to make a claim regarding damage from guests, the claim will be denied by default.
AirBNB takes 3% of every reservation from the host, but they also take about 15% from the guest! That means the guests are WILLING to pay 18% more than the host is actually receiving but the host is not getting any of that extra money.
Even if the property owner uses a Strict Cancellation Policy to as protection from flaky guests canceling their reservation at the last minute, AirBNB has the right to override that policy at any time and without warning or explanation refund the guest the entire amount of their reservation, even if it’s less than 24 hours before the guest is scheduled to check in.
The “1 million dollar host guarantee” is virtually impossible to actually claim. AirbnbHell warns property owners not to for this “marketing ploy”.
Most professional lease forms contain wording that prohibits subletting, such as the California Realtor lease form:
Landlord rents to Tenant and Tenant rents from Landlord, the real property and improvements described as:
The Premises are for the sole use as a personal residence by the following named person(s) only
Tenant agrees to comply with all Landlord rules and regulations that are at any time posted on the Premises or delivered to Tenant. Tenant shall not, and shall ensure that guests and licensees of Tenant shall not, disturb, annoy, endanger or interfere
with other tenants of the building or neighbors, or use the Premises for any unlawful purposes, including, but not limited to, using, manufacturing, selling, storing or transporting illicit drugs or other contraband, or violate any law or ordinance, or commit a
waste or nuisance on or about the Premises.
(If checked) CONDOMINIUM; PLANNED UNIT DEVELOPMENT:
The Premises are a unit in a condominium, planned unit development, common interest subdivision or other development governed by a homeowners’ association (“HOA”). The name of the HOA is
Tenant agrees to comply with all HOA covenants, conditions and restrictions, bylaws, rules and regulations and decisions (“HOA Rules”). Landlord shall provide Tenant copies of HOA Rules, if any. Tenant shall reimburse Landlord for any fines or charges imposed by HOA or other authorities, due to any violation by Tenant, or the guests or licensees of Tenant.
ASSIGNMENT; SUBLETTING: Tenant shall not sublet all or any part of Premises, or assign or transfer this Agreement or any interest in it, without Landlord’s prior written consent. Unless such consent is obtained, any assignment, transfer or subletting of
Premises or this Agreement or tenancy, by voluntary act of Tenant, operation of law or otherwise, shall, at the option of Landlord, terminate this Agreement. Any proposed assignee, transferee or sublessee shall submit to Landlord an application and credit
information for Landlord’s approval and, if approved, sign a separate written agreement with Landlord and Tenant. Landlord’s consent to any one assignment, transfer or sublease, shall not be construed as consent to any subsequent assignment, transfer or
sublease and does not release Tenant of Tenant’s obligations under this Agreement.
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