AirBNB and [not] breaking the law
May 28, 2013 11:36 AM   Subscribe

If I want to charge visitors a fee to stay in the apartment I rent form a landlord, what might I want in my lease? Would I absolutely need a clause about subletting? What are the exceptions?

Let's pretend that I do everything by the letter of the law and the contracts that I sign. I am renting an apartment in San Francisco. I would like to use that apartment to host visitors for a fee (maybe with AirBNB, maybe something else).

Three questions:
1) If I want to charge visitors a fee to stay in the apartment I rent form a landlord, what might I want in my lease? Would I absolutely need a clause about subletting?
2) What are the exceptions? Is it really "subletting" if a visitor is only in the space for less than a month (say 5 days)?
3) Alternatively, what if I wanted to host visitors and NOT charge them?
posted by jander03 to Work & Money (11 answers total) 4 users marked this as a favorite
The latest I've heard in the news is that the original tenant must be in the apartment during the Airbnb stays. (Based on a recent NYC case.)
posted by bquarters at 11:42 AM on May 28, 2013

Best answer: This article suggests that renting your apartment for less than 30 days can't legally be done in SFO.
posted by craven_morhead at 11:47 AM on May 28, 2013 [1 favorite]

SO MUCH NOT A LAWYER, but can you sell tourguide/hosting services and then let them stay at your house for free?
posted by 256 at 11:52 AM on May 28, 2013

Best answer: As I understand it, and as craven_morhead's link suggests, you'd need a hotel (bed & breakfast) permit, which would involve the Planning Department, Health Department, and a bunch of other agencies, and would need the appropriate paperwork to remit hotel occupancy tax (15-16% in SF) on guest stays. You'd probably need to make modifications to the property to comply with various health and safety codes as well. Along the way, you'd probably run into neighbors who are opposed to the whole thing, causing the process to grind to a halt. Your landlord would also have to be involved in the whole permit process.

See, for example, this Quora question.
posted by zachlipton at 12:08 PM on May 28, 2013 [1 favorite]

As craven_morhead points out, it's not just about your landlord--many cities, SF included, consider short-term rentals to fall under the designation of "hotels." In that situation, you should have insurance, licenses, a whole host of other things, and charge the appropriate taxes to your "tenants." So, in short--no, what you're asking can't be done (not exactly, depending on where you live, but not in SF).
posted by epanalepsis at 12:08 PM on May 28, 2013 [1 favorite]

Not so much of a legal/permits problem, but: if you live in a security building, I could see a lot of hassle getting your renters access to residents-only areas --- for instance if there's a pool or a gym that needs residents' passes, or even just locked security entrances to the building itself. And I don't think you could get away for long with just leaving the renters your own passes --- somebody is going to catch on quickly that jander03 looks like a totally different person than last week or the week before, and then you'd have building management complain to your landlord, who'd come down on you.
posted by easily confused at 12:12 PM on May 28, 2013

Best answer: As others have said, there's the lease part and the city part.

On the city part, the Board of Supervisors, AirBNB (and other folks), and the SF Tenants Union are currently in talks to create legislation that would clarify the situation. It seems to be generally understood that as of right now very short-term rentals might be illegal, though I am not a lawyer, and also to my knowledge that has not been tested in San Francisco. (It has elsewhere, like NY.)

The legislation is promised "real soon now," but politically things are a bit fraught on the tenant / landlord / city front for other reasons (condo conversions), so it might be a bit before things are resolved.
posted by feckless at 12:19 PM on May 28, 2013

Best answer: Is it really "subletting" if a visitor is only in the space for less than a month (say 5 days)?

Unless there is an unusual and specific (and, frankly, bizarre) definition for "sublease" or "sublet" in your local landlord/tenant code, YES it is "really subletting" if you allow someone to stay in property (for which you are the leasee) for any period of time in exchange for money. That is what "letting" (or "leasing") is: permitting a nonowner (the "tenant" or "leasee") exclusive use of the property in exchange for money. Since the place is already "let" to you, so when you "let" it to someone else, it is--by definition--"subletting" (that is, a lease agreement, subordinate to the original lease agreement between you and the owner).

So, if your lease prohibits subleases, you cannot charge someone money to stay in your place, even for a couple of days (although, in my experience, people often break this clause, like when their boyfriend moves in midway through the lease term). If your lease limits overnight guests to a specific number of days, you might be liable for breaking your lease if you do this (typically, these clauses exist to prevent people circumventing the law with regard to occupancy limits, but generally they can be enforced regardless of whether you are circumventing occupancy limits with them). I am a landlord (but not in SF) and if a tenant asked that either clause be removed from the lease, I would not lease to that person. My insurance, my security deposit, and my relationship with my tenant protects me (to an extent) from misuse of my property by tenants and their guests--none of that is in place if my tenant decides to marketl my property as an AirBnB.
posted by crush-onastick at 12:38 PM on May 28, 2013 [2 favorites]

Landlord/Tenant laws in SF are very strict and sometimes inscrutable. You could be both in trouble with your landlord and also in trouble if one of your short-term tenants decides to stay. Before starting this endeavor, I'd go see a lawyer who specializes in this area. SF is not like other cities and assuming as much could get you into serious trouble.
posted by quince at 2:00 PM on May 28, 2013

Best answer: Easily confused's comment above is a huge point here.

The last two apartments i rented made a pretty big deal out of the security keys(which are fancy, expensive medeco "do not duplicate" affairs with weird nonstandard slotting and such). You couldn't buy an extra copy at any price for anyone who wasn't on the lease, and you absolutely weren't allowed to hand your keys to anyone else for even 5 minutes to run stuff in from the car or something.

And yes, this kind of thing gets enforced. At my current place it's a $500 fine, they re-key the entire building, and possibly eviction. At my old place it was ??? and possibly eviction(i don't have the lease laying around, but it was equally onerous).

As someone whose parents were landlords when i was growing up, and who has a slightly above casual level of familiarity with local landlord tenant codes/laws and how things tend to play out... this is where i see the problem being.

1. You rent your place out on airbnb
2. ANYTHING goes wrong. That person has a conflict with you over payment and you try and collect, and they try and retaliate. They damage something in the building or your apartment. They get a noise complaint. They get busted with your keys coming in to the controlled access building. Invent something, there's a million ways step 2 could happen here.
3. Your landlord somehow finds out or becomes involved. Maybe they have to deal with the damage, anything. The point is they're now aware
4. Now your landlord is FUCKED. This is almost exactly the same situation as if i owned a car, and had my mom on the insurance. My mom lends the car to her friend and that friend gets in an accident. Now I'M liable for the damage and have to prove i wasn't driving it(especially if that person just skips out), and a million other headache things. Basically they'd have to prove they weren't breaking some law by "knowingly" letting this type of illegal thing go on, potentially at least.

It's almost exactly the same as my car analogy here, because if there's illegality going on in this type of rental the landlord could get in trouble. Exactly how would vary from city to city, and the lease might cover their ass a bit, but this is a distinct possibility. I've definitely heard of landlords getting in trouble for situations that arose while illegal subletters were there.

What's going to need to happen here is something that looks like this(I'm not a lawyer, and i'm bullshitting this up, but paypal seemed like it would never be legal too and they figured it out): AirBNB is going to have to get hotel permits of some sort everywhere they want to operate and then have the people renting the places somehow be covered as employees or something. They're also going to have to cover the insurance, and any other licensing/liability stuff.

Then there's the pretty insurmountable hurdles of anyone subletting their rental for this with relation to the lease, city zoning stuff about where hotels can be, etc. A bed and breakfast type of license might get around this... but i STILL think there's going to be a huge battle in this part of it.

There's also a serious point to consider here; How ridiculously unfair is it to the other people in your controlled access building that you're letting people you don't know, whose names airbnb won't even give you take your keys and stay in that building? Everyone besides the person renting via airbnb has something to lose here, and seriously questionable opportunity for recourse.

Oh, and to really quickly directly knock out your questions

1) If I want to charge visitors a fee to stay in the apartment I rent form a landlord, what might I want in my lease? Would I absolutely need a clause about subletting?

Yes, but that probably wouldn't help at all. All the leases i've ever seen and signed, and the standard ones i've ever seen anyone hand out all say that subletting MUST be cleared with the landlord. The subletter nearly always needs to pay the application fee and get a credit/background check through one of those renter-clearing companies. I would almost go so far to say that a lease which is essentially "sublease whenever you want within XYZ limits" doesn't exist. It always has to be cleared with the landlord so that they can buckle their seatbelt and cover their ass.

2) What are the exceptions? Is it really "subletting" if a visitor is only in the space for less than a month (say 5 days)?

There aren't any. It works how i described it above with requiring you notify the landlord. The exceptions i guess would be the "absolutely no subletting ever" places.

3) Alternatively, what if I wanted to host visitors and NOT charge them?

This would fall under the "No guests for more than XYZ days a month" clause in your lease. Nearly all leases have this, but not every single one. Some leases do it by individual guests, some leases do it as any guests. Some are even more draconian and say something like "you can't have a guest over for more than 2 weeks total in six months" or even "you can't have any guests stay more than X total nights in Y time period".

This is partially to prevent them from even coming close to establishing legal residence, in which they'd need to be evicted for the landlord to remove them. It's also to prevent some kind of under the table tomfoolerly like AirBNB before it existed. Sort of like tax evasion, it was an easy indirect way to bust people doing things like this.

Crush-onastick above covers some of the issues i touched on with insurance/deposits/contracts and legal relationships that also come in to play here.

Hope that helps.
posted by emptythought at 2:41 PM on May 28, 2013 [3 favorites]

Response by poster: Super-helpful; thanks all!
posted by jander03 at 11:51 PM on May 28, 2013

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