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5 Ways to Avoid an Airbnb Rental Nightmare

by Vinay Jain 5 Ways to Avoid an Airbnb Rental Nightmare

Imagine you rent out your house on Airbnb to a guest for a short-term rental. After part of the stay, the occupant stops paying the rent. And you can’t get him to leave.

What would you do? Try to change the locks? Cut off the electricity? Call the police?

Unfortunately this is exactly the dilemma a California host found herself in recently after renting out her Palm Springs condo on Airbnb.  It was a 44-day rental. The guest paid in advance for the first 30 days, but never paid for the remaining time. And, at the end of the 44 days, the guest refused to leave. To top it all off, he is threatening to counter-sue the owner on a variety of dubious grounds.

And here’s the kicker: because the guest has occupied the unit for more than 30 days and has apparently met certain other conditions under California law, he has now acquired the legal rights of a tenant. This means that in order to evict him, the landlord must go through the courts to secure the eviction, a process that will potentially take months and cost thousands in legal fees.

Owners Beware

California isn’t the only place where a guest can acquire the rights of a tenant after a certain period of occupancy (some articles about the Airbnb situation have referred to this situation as “squatter’s rights,” but legally speaking that term refers to a different concept called adverse possession). In New York City, somebody who has lawfully occupied a dwelling for 30 consecutive days gains tenant status and cannot be evicted except through the courts.  A New York City landlord who resorts to self-help – for example, trying to lock out a tenant – faces penalties for the tenant’s expenses while he or she is locked out, as well as penalties up to three times the amount of the tenant’s expenses.

On the other hand, if the occupant is present for less than 30 days (or whatever the applicable time period  is where you live), their rights are more like those of a hotel guest than a tenant. This typically means that the owner need not file an eviction lawsuit to evict and has greater freedom to legally do things like change the locks or cut off the power.

What You Can Do

If you’re a host, there are steps you can take to reduce the chances of something like this happening to you.

1. Do your homework. Before you rent to someone, try to validate their trustworthiness. In the Palm Springs case, the owner acknowledged that she knew almost nothing about the guest before renting to him – he had no previous reviews online. Employers use Facebook and other social media all the time to check applicants out before hiring them – there’s no reason you shouldn’t do the same with someone you’re inviting to stay in your home.

2. Know the law. Familiarize yourself with your local landlord/tenant laws and understand how long a guest can stay before they attain the status of a tenant. But keep in mind that trying to get around the law by, for example, having your guest check out and check back in every 30 days, is not a good idea. At minimum it violates the spirit of the law, and in fact it is illegal in some places and may result in a fine.

3. Sign a contract with your guest. In it, clearly lay out the check-in and check-out dates and times, the rules of conduct that you expect the guest to follow along with any special instructions, payment terms, and the fact that the guest will be liable for any damages resulting from their stay or refusal to vacate. The contract will not only give you a strong leg to stand on if you end up having to go to court, but it will also give you and the guest the opportunity to clarify expectations so that there are no misunderstandings to begin with.

4. Don’t assume you’re protected. If you host on Airbnb, don’t assume that the Host Guarantee will protect you. The Host Guarantee is designed to cover guest damages, theft or vandalism, but not a refusal to vacate. In any case, read the fine print — there are a variety of requirements that your must meet to qualify for compensation under the Host Guarantee.

5. Get a deposit. An upfront deposit helps ensure that if something does go wrong, you’ll have a financial buffer. (From a legal standpoint, it’s usually easier to keep money than it is to try to collect it.) If you do get a deposit, just be sure that you have a written contract (see #3) which makes it very clear under what conditions the deposit will or will not be returned. Also check your local laws for possible limits on how much you can ask for as a deposit.

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Airbnb and other short-term rental sites are an important source of supplemental income for a lot of people, and fortunately horror stories like this one are rare. By taking some sensible precautions you can help ensure that your guests don’t overstay their welcome.

photo of Vinay Jain
Vinay Jain

As Chief Legal Officer, Vinay serves as Shake's general counsel, is responsible for the company's legal contracts and content, and leads efforts to educate consumers and small businesses about the law.

Read more posts by Vinay