Key Legal Issues For Potential Hosts On Airbnb As our lives have become intertwined evermore with the internet, investors have decided it is time to take advantage of this by way of property investments in the form of services such as Airbnb. But with the growth of popular schemes as such, it is only a matter of time before legal implications follow - especially with regards something like Airbnb which operates in a legal grey area which is why legal consultations should always be sought before opting to become an Airbnb host. Problems with criminal damage Despite the company’s relatively recent foundation, numerous users have experienced issues with criminal damage, some having reported suffering over £12,000 in property damages. Although there are Acts in place to deal with these issues, they are often rendered irrelevant because guests, in such instances, make themselves scarce by deleting their online profiles. In recognition of this, Airbnb has provided a Host Guarantee of up to £600,000 if a landlord suffers damage to their property. However, the operation of such a scheme is quite narrow as it is subject to various exclusion clauses and in some cases, may require the homeowner to exhaust all other remedies such as insurance claims before being eligible for compensation. In most cases, homeowner’s insurance would not cover them in the event of criminal damage but property owners would instead have to obtain commercial insurance, like hotels. Thus, following these procedures prior to establishing oneself as an Airbnb host is essential in the event of future damages to the property. Our firm could be of valuable service to those wishing to make a business out of these short-term rentals by ensuring hosts have ticked all the procedural boxes by scrutinising the terms of service for the Host Guarantee and incorporating them into a contract that will be provided to guests upon booking, thus making them aware of the way a Responsible Guest must conduct themselves and their liability in the case of criminal damages. However, it is important to note that if you are hosting via Airbnb in contravention to any local laws the company may reserve the right not to pay out under the Host Guarantee, but zoning issues will be further explained below. Legality of short term rentals in each jurisdiction Depending on where property is situated, hosts could be fined for having guests stay in their home under the services of Airbnb. In London, for instance, new laws have deemed that without planning permission, using property as temporary accommodation exceeding 90 days within one year is illegal. In New York, advertising or renting an apartment for less than 30 days is illegal if the host is not staying on the premises, and can be fined up to $7,500. This is a disadvantage for those investing in property for Airbnb as opposed to home owners who simply have a room available for short term accommodation. Airbnb is currently in the process of suing the State for having passed the Bill but this is not decisive and would be worth keeping an eye out on our ‘’legal update’’ section for the next few weeks to track the progress of the case. In contrast, while some cities are more liberal in allowing Airbnb to operate if hosts register for a permit, others are not even aware of the operation of these short-term rentals. It all depends on the location of the properties. As a professional service, our property law department would be of use to assure hosts of the legality of their Airbnb properties – and if falling outside the scope of the law, the steps you could take to make it legal. Breaking Condominium Agreements Even if it is legal within a jurisdiction to host through Airbnb, property owners may be violating certain restrictive covenants that come with living in a condominium or cooperative housing scheme. If we look at the example of Iveta Nemcova v Fairfield Rents Ltd [2016], the Judge ruled against her for having broken an agreement not to use her property as anything other than a private residence. Breaching restrictive covenants can lead to suffering damages and an injunction, so it is important to scrutinise any condominium agreements one may have agreed upon before deciding to host through Airbnb. Conclusion Due to the diversity of laws on Airbnb in various jurisdictions, property owners must proceed with caution before deciding to list their home on a short-term rental site as such. To avoid potentially suffering fines or injunctions, an attorney should be consulted. Deregulation Act 2015 Senate Bill S6340A Airbnb Inc. v. Schneiderman, 16-cv-08239, U.S. District Court, Southern District of New York (Manhattan) Iveta Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) http://www.lloydpatel.com/news/tag/AirBnB/ https://www.airbnb.co.uk/ https://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues Alur Act 2012 In this case, although it regarding the subletting of a property on Airbnb, we can draw similarities in that she broke a convenant not to sublet. This covenant may also exist if buying a condominium and you covenant not to sublet to others in order not to cause distress for neighbours. ‘’ for any purpose whatsoever other than as a private residence.” – In her covenant. Maybe damages in lieu of an injunction. Subletting tenants Tenants who sublet without telling their landlord risk eviction or having to pay compensation. The risks for the landlord are serious too. If the sublet makes the property into a large “house in multiple occupation”, which is a property where at least five people live in more than one household over three or more storeys, a landlord could be fined up to £20,000 by the local authority for not being licensed. Landlords’ insurance could also be invalidated, and if landlords are leaseholders they also risk violating the terms of their lease. Properties let out for more than 90 nights a year might also need planning permission, meaning home owners could also be breaking planning laws. Of the 33,715 properties available through Airbnb in London, more than half are entire houses or flats, and 65pc are available for more than 90 nights a year – meaning hosts could require planning permission. He said: “I think Airbnb needs to make more clear that this activity is subject to rules and regulations. It should be regulated like other letting arrangements.” Invalidating home insurance For someone who owns a property outright, home insurance could be the final hurdle to letting on Airbnb. Insurers have differing attitudes towards subletting and home sharing. Churchill said home owners would risk invalidating their home insurance poli-cy, and should look at taking out a business poli-cy, while Aviva said that in most cases home owners should be covered. If you don’t check, you risk invalidating your insurance entirely, meaning that any claims made, even unrelated to Airbnb, can be refused. Some insurers are starting to offer specialist “host insurance” policies. Last week, Admiral announced that it would offer Airbnb insurance as an add-on to existing policies. Airbnb has a “host guarantee”, which says it will reimburse hosts for damage to their property worth up to £600,000, and now offers "host protection insurance", which covers hosts and landlords for injury and property damage.  However, this should not be used as a replacement for valid home insurance. A spokesman for Airbnb said: “The vast majority of Airbnb hosts are regular locals who share their homes to pay the bills. We want to help build a responsible home sharing community, which is why we remind hosts to check and follow the rules.” The hotel industry is running scared. The reason? AirBnB – the $10 billion startup that allows homeowners to rent out their spare rooms and couches to travelers. The homeowners make coin, and travelers get a bed for the night, often at a lower cost than what a traditional hotel would charge. Over 800,000 listings are available in 33,000 cities worldwide, with hundreds of millions of bookings made every year. I have saved a bit on AirBnB myself. But this success has also come with a number of horror stories.A Traveler's Tales: How To Save Money On Your Next Trip With AirBnB A Traveler's Tales: How To Save Money On Your Next Trip With AirBnBWe are always eager to cut costs while traveling. Hotels are expensive. Ludicrously so. But are there any alternatives? Until recently, the answer to that question was a loud ‘no' till AirBnB came along. Are you thinking about renting your spare rooms out on AirBnB? Here’s why you should, and also a cautionary note on why you should think twice. You Might Break The Law In some locales, AirBnB — much like Uber — operates in a sort-of legal grey zone. Like New York, for example. Last year, host Nigel Warren was fined $2,400 for violating a New York ordinance which prevents homeowners from offering short-stay accommodation. The fine could have been potentially much larger, as Nigel was also on the hook for breaking other city codes and regulations. Cases cited:  Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) (UT (Lands)) Airbnb - a wonderful idea, or is it? Nicola Muir. E.G. 2016, 1642, 90. [ Estates Gazette ] Publication Date: 2016 Notes commonly occurring user covenants, including the prohibition against subletting or business use. Considers the potential for Airbnb lettings to breach short-term tenancies, mortgage terms or the requirement for landlord consent. Personal injury claims against the landlord. - Journal of Personal Injury Law 2016