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Wednesday, May 22, 2013

Bucks: A $2,400 Fine for an Airbnb Host

Nigel Warren faced steep fines for violations from renting his apartment on Airbnb.Todd Heisler/The New York Times Nigel Warren faced steep fines for violations from renting his apartment on Airbnb.

Back in December, I wrote a column about Nigel Warren, who was facing the prospect of thousands of dollars in fines from New York City for renting his room in a two-bedroom apartment out on Airbnb. A city inspector believed he was breaking the law, but the city ended up dismissing the charges right before the column appeared.

From there, however, the tale took an odd turn. The city revived the charges and set a hearing date for late January. Mr. Warren, appearing on behalf of his landlord, showed up only to find, to his great surprise, that an Airbnb team was there too, including outside counsel it had retained. The company intended to intervene on his behalf, but it hadn't let him know that it would appear at the hearing.

Because of some confusion at that hearing, the city scheduled a new one, which finally took place on May 9. There, both Mr. Warren and Airbnb argued that certain language in New York's administrative code allowed lawful boarders, roomers and lodgers to stay in an apartment like Mr. Warren's for less than 30 days.

An administrative law judge, Clive Morrick, disagreed with their interpretation in a decision he issued on Monday, noting that the Airbnb renters did not have access to all parts of the apartment, specifically the room of Mr. Warren's roommate, who was still living there while Mr. Warren was away and renting out his room. Mr. Morrick also questioned whether complete strangers staying for a few nights could ever fall under the code language in question.

Airbnb cannot file an appeal, since it was only a “discretionary intervenor” in the case, somewhat akin to a party filing an amicus brief. Mr. Warren, who has told his landlord that he will cover the $2,400 in fines, says that he's willing to consider appealing if it doesn't cost him any more money in legal fees and if Airbnb is willing to help him refine and advance his arguments.

But the bigger question here is the same one I asked in my column in December and Airbnb would not answer at the time: Given that Airbnb is well aware that many of its listings in large cities are probably violating local laws, shouldn't it warn its hosts, with some sort of aggressive pop-up or similar disclosure, when they first post a new listing that they are potentially putting themselves in legal jeopardy?

On Tuesday, Airbnb sent me a statement saying that it plans to start doing just that. Here's what the warning will say:

“Congratulations! You're almost done listing your new space and it's looking pretty sharp! As you're deciding whether to become an Airbnb host, it's important for you to understand how the laws work in your city.

Some cities have laws that restrict your ability to host paying guests for short periods. These laws are often part of a city's zoning or administrative codes. In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement. These rules can be confusing. Often, even city administrators find it tough to explain their local laws.

We are working with governments around the world to clarify these rules so that everyone has a clear understanding of what the laws are. In the meantime, please review your local laws before listing your space on Airbnb. By accepting our Terms of Service and activating a listing, you certify that you will follow your local laws and regulations.

Many of us at Airbnb are hosts ourselves and we're passionate about making it as easy as possible to host around the world.

Onwards and Upwards!”

I also asked the company about the possibility of blocking listings from addresses of buildings where residents or the management company have told Airbnb that listings are not legal or welcome. The company had not yet answered this question by the time we published this post.

The company's approach will probably influence many people in cities like San Francisco and New York, where it has a large number of listings and its hosts have clear legal exposure. The travel news site Skift estimated in January that half of Airbnb's listings in New York City are illegal. The company did not comment on this estimate.

If you're already a host in New York, keep in mind that the city still seems only to be conducting inspections at apartments where neighbors have complained about the comings and goings of all the random strangers. But landlords are on to this too, as Fast Company's Chris Dannen noted last year after his landlord served him with a cease-and-desist order. Most leases prevent the sort of subletting that goes on via Airbnb every day.

Airbnb and other companies hope to clarify or change some of the laws that restrict these sorts of short-term rentals. Here's what Airbnb said in a statement about that effort and a 2010 law in question:

“This decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes. There is universal agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves aimed at by overzealous enforcement officials. It is time to fix this law and protect hosts who occasionally rent out their own homes. 87 percent of Airbnb hosts in New York list just a home they live in - they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law.”

If you're an Airbnb host who is probably violating local laws, do you intend to keep on renting your room or home out anyway until the legal dust settles, just as Airbnb's employees seem to be doing?