Airbnb for Landlords

January 11, 2017

Today on Facebook, a friend of mine posted about a nightmare experience she had with an Airbnb reservation. While traveling for business, she often relies on Airbnb short-term lodging rentals as an alternative to booking a hotel. “My host literally told me that there would be a string of guests with no one cleaning or changing sheets and towels between them. Also her landlord had just called her to tell her to stop Airbnbing her apartment.”

Airbnb and similar services such as HomeAway have become increasingly popular for providing short-term lodging in residential properties across the globe. These services don’t actually own property, they are marketplaces where “guests” search for various types of accommodations – for example, Airbnb offers entire houses or apartments, a private room, or even shared rooms with their “hosts.”

The above scenario is among the more tame examples of Airbnb horror stories that I’ve read. While the majority of my friends who have utilized the service have had great experiences, the Internet is rife with cautionary tales for hosts and guests alike, including guests trashing an apartment and these horror stories from Reddit.

Let’s get back to my friend’s situation above. Does the landlord have the right to prohibit their tenant from using Airbnb?

The answer is that it depends on two key factors: whether the applicable state or local laws permit the use of the property for Airbnb, and also whether the lease permits or prohibits the use of the property for that purpose. The remainder of this post will focus on the latter factor, since the laws and requirements of your city and/or state may vary.

When hosts sign up for Airbnb, they must agree to the Airbnb Terms of Service, which require hosts to abide by all applicable laws, including but not limited to zoning laws that may require a permit or altogether restrict short term bookings. The Terms of Service also specifically prohibit hosts from:

  • offering, any Accommodation that you do not yourself own or have permission to Book as a residential or other property (without limiting the foregoing, you will not list Accommodations as a Host if you are serving in the capacity of an agent for a third party); and
  • offering, any Accommodation that may not be Booked pursuant to the terms and conditions of an agreement with a third party.

Therefore, assuming the tenant has complied with all applicable laws, if the lease (or another legally binding agreement such as condominium or homeowners’ association declarations or rules and regulations) doesn’t prohibit tenants or residents from using their properties with short term booking services, they may use the property for that purpose.

So, how can a landlord prohibit a tenant from using a short term booking service like Airbnb? Depending on your goals and the needs of the tenant, there are several ways to approach this issue.

In the lease, you could add terms that specifically restrict use of the premises for short term booking services. This would be the most clear way to address the subject, since you could specifically prohibit by name the services that the tenant may not utilize. Many residential leases also address the tenant’s ability to sublet the property, either by requiring the landlord’s consent prior to entering into a sublease or a flat prohibition on subletting. Another approach to limiting a tenant’s ability to sublet would be to allow subletting, but only with a signed lease agreement with a term of greater than six months, for example. Another approach would be to specifically list the residents that may be overnight guests at the property, but that may be difficult to enforce and has broader implications than the above restrictions.

If the tenant were to breach any of these provisions, that could constitute an event of default under the lease which would allow the landlord to issue a warning and/or terminate the lease agreement.

In any case, if you are concerned about your tenant’s ability to use Airbnb or a similar service, it should be appropriately addressed in the lease agreement and reviewed by qualified counsel to ensure that it accomplishes your goals.

Matt Landis is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University School of Law and advises clients on issues of Real Estate LawBusiness LawIntellectual Property Law and Information Technology & Internet Law.