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The fall back of House-Hosting

In recent years house hosting websites such as Airbnb, Couch surfing, Homestay, VRBO, OneFineStay, Roomorama, etc. are growing in popularity. These sites allow renters and homeowners to list their place or a room for a certain price and usually a lot cheaper than an upscale hotel or villa. This is profitable towards homeowners and renters, it’s especially a good way to make money when the owners are out of town.  Well this idea seems great but if you don’t own the property this can become a major problem. 

If you have ideas about getting involved with one of these sites, here are a few things that you should keep in mind.

  • Even if your place doesn’t have any kind of pest issue, your guests can claim any sort of insect/pest/vermin problem, Airbnb will instantly return 50% of your guests money for their entire reservation, even if it’s a year long reservation and the claim is false. This is just one of the common scam tactics that people know how to use.
  • If your guests steals your valuables or any other difficult-to-prove assets, Airbnb can’t do anything about it.
  • If you end up making a claim regarding damage to reclaim part or all of the security deposit, Airbnb will demand receipts of your original purchase, even if it’s furniture that you’ve owned for 20 years. Also, if you wait over 24 hours to make a claim regarding damage from guests, your claim will be denied by default.
  • Even if you use a Strict Cancellation Policy to protect yourself from guests canceling their reservations at last minute, Airbnb has the right to override that policy at any time and without warning or explanation and 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. Airbnb has been known to cancel and remove even long-term hosts listings without any kind of warning and without any explanation. Because of this it may cause you to lose communication with your current guests, and lose your income for all upcoming reservations which are also instantly canceled.

Besides some of the practical fears of using these sights for income, if you happen to live in a highly-dense city it can lead you into a significant amount of legal trouble. As an example, Airbnb provides an online platform to allow individuals to rent out their homes, rooms or apartments to visitors. While this is not in itself illegal, in many cases the rentals advertised on the site fall foul of local housing laws and regulations. For example, in New York owners or tenants cannot legally rent their apartments out for short periods of time, as of less than thirty days unless they are also living in the property. There are also tax complications- in many cities those renting out holiday accommodations are expected to pay a hotel or tourist tax. Aware of the need to adapt,  Airbnb recently updated its terms of service to make sure that its users were more aware of local laws and taxes, emphasizing the host’s responsibilities to comply to them. Which in reality, most hosts have not been charging their guests hotel tax, let alone paying it to the city.

Is there a clause in your renters agreement saying you can’t rent to others? Landlords have been known to evict tenants because they weren’t following the contract. There are so many things that can happen when a stranger stays at your place… Even if you have renters insurance, you most likely won’t prove your case when your insurance company finds out you were using a one of those sites. Since you are pretty much putting yourself at that risk, you can’t really blame anyone for things damaged and missing. Remember it isn’t worth the legal trouble, especially if you are already renting.

Posted by: cabgroup on July 20, 2017
Posted in: Uncategorized