Page 8 - New England Condominium December 2019

8 NEW ENGLAND CONDOMINIUM -DECEMBER 2019 NEWENGLANDCONDO.COM share model has morphed from hitching a ride with a fellow commuter to basically hailing a private livery service, the typical home-share is not of the ‘stay in my spare bedroom for a week’ variety. To cite one big example, according to Inside Airbnb, an independent, non- commercial set of tools and data intended to show how Airbnb is really being used in cities around the world, 51.8% of New York City’s approximately 50,000 Airbnb listings are for an entire home or apart- ment—and 34.1% are hosts with multiple listings (which can be multiple rooms in one home or apartment, or multiple en- tire apartments). These data points indi- cate that a majority of hosts in New York, which is Airbnb’s largest domestic mar- ket, are not in occupancy when renting their rooms or apartments—which puts them in violation of both city and state law, and most likely the host’s own pro- prietary lease or condo declaration. Indeed, most co-ops forbid subletting altogether; others impose restrictions on how long a shareholder can sublet, or set durations for shareholder occupancy be- fore the unit can be sublet, or both. Even where subletting is permitted, the bylaws dictate lease and renewal terms—usually one year at minimum—and require that all occupants be interviewed by a screen- ing committee and approved by the board of directors. Condos are following suit, adds Todd M. Ross of One Point Brokerage, a com- mercial insurance brokerage based in Manhattan. “We have also seen new con- do buildings put prohibitions in their gov- erning documents on unit owners renting units out for less than a period of one year. This gives them more leverage over any short-term rental issues that arise from unit owners.” Most condominium associations already forbid leases shorter than 30 days, and many have application procedures that are as labor- and fee-in- tensive as those of co-ops. Stranger Dangers While they may seem onerous, these provisions exist to protect the corpora- tion or association and its owner-share- holders’ economic interests, comfort and quality of life, and safety. Airbnb and its ilk upend these protections, putting buildings and communities at risk on a number of fronts. For one thing, says Dean M. Roberts, Esq., an attorney with the law firm Nor- ris McLaughlin, which has offices in New York, New Jersey, and Pennsylvania, if owners and shareholders are opening their units to a constantly rotating pa- rade of short-term renters, “There’s no control over who’s coming in and out of the building”—a clear tax on (if not a col- lapse of) building security. Most build- ings or associations have an established if they offer supplementary coverage. So procedure for guest access, whether that when things do go bad (or very bad), li- be signing in with a doorman, acquiring ability falls squarely on the owner. entry through an intercom, or presenting identification to a security guard. Airbnb ance ramifications for the co-op or condo ticularly when their own safety is not so guests who stay in a home without the association as well. According to Ross, much in jeopardy if they are not even owner or shareholder in residence avoid “\\\[W\\\]e have run into situations where a staying in the unit or building with their these procedures, and could be seen as carrier has not renewed a co-op/condo’s ‘guests.’ The fines imposed by co-ops, trespassers if neighbors, management, policy, or has declined to give them a condos, and municipalities usually do not or security personnel aren’t aware of the quote because the building has open vi- arrangement. (The same is true even for olations or suits against it due to allega- friends or extended family of an owner tions that the building \\\[is renting\\\] units towns—including Boston, as previously or shareholder, by the way. That is, if out on Airbnb, et cetera.” you are inviting your college roommate to stay in your apartment while you are dos must then turn to non-state-admitted number and duration of violations. away on a long vacation, you risk violat- ing your proprietary lease and endanger- ing your neighbors—which may prompt ductibles so that any fines or claims as- them or your board to refer the matter to sociated with the activity are not covered. short-term listing or platform. Miami has authorities. So it pays to reach out to your And who pays then? Since the building strict licensing parameters, and has steep- board or management before you pack or association’s insurance costs are paid ly escalating fines of $100 for the first vio- your bags!) All those safety and security through common charges, that burden lation, $1,000 for the second, and $2,500 measures that are in place to protect you falls on all the other shareholders or unit for the third. Miami Beach goes even and your belongings—and, which, not in- cidentally, you pay for through your com- mon charges—are being short-circuited any time someone stays in your unit with- out your presence. Also, with random people who aren’t privy or beholden to the house rules of a building or association roaming around the property, “The potential for downside is considerable,” says Roberts. Airbnb- type ‘guests’ not only bypass the normal vetting procedures to which all other resi- dents submit; they are also less informed (if not totally ignorant) about emergency procedures, important contacts, neigh- borhood or building idiosyncracies, or even where to put their garbage. This poses any number of risks, not only to the short-term renters themselves, but also to the legal residents, their proper guests, staff, and visitors, as well as the building’s own staff and contractors. Additionally, consider the disparities in behavior and ‘street smarts’ between a vacation traveler and a full-time resident: travelers tend to come and go at irregu- lar hours, carry cash and valuables, have fewer local connections, drink or party throughout the day, and don’t have the lay of the land—all making them more likely targets (or even perpetrators) of criminal activity. Although the probability of something really awful happening to, or as a result of short-term renters is relatively low, Rob- erts warns that “when it goes bad, the po- tential is for it to go very bad.” And when it does, lack of industry regulation, added to homeshare platforms’ vulnerability to abuse and fraud (and worse, in some cas- es) makes it difficult for the aggrieved to find recourse or solutions. Homeowners’ and renters’ insurance providers typically deny any coverage for commercial activity in the home—including short-term rent- ing—and sites like Airbnb have opaque policies that can make filing claims or determining liability more difficult, even the activity or not. That’s not to say that there aren’t insur- In some cases, these co-ops and con- insurance carriers, who may offer quotes with specific exclusions or very high de- owners—whether they were involved in further, imposing the highest fines for il- Fine, Fine Me Of course, to the average ‘host,’ the potential income from short-term rent- ing may outweigh all these risks – par- come close to what someone can earn in the share-osphere. That is why cities and mentioned —are installing fining struc- tures that escalate or accrue based on the Chicago, for example, can impose fines of $1,000 to $3,000 per day, and requires specific licensing and registration for any HOME SHARING... continued from page 1 Many ‘destination cities’ across the country—in- cluding Boston—have attempted to rein in short-term rentals in the last couple of years. So while it is pos- sible to make some extra coin by listing your apart- ment on Airbnb or similar homesharing platforms, Bostonian hosts must jump through a number of administrative hoops in order to do so legally. What follows is a quick overview of Boston’s requirements for short-term rental hosts —it is not an exhaustive checklist, and does not cover other municipalities outside or adjacent to Boston. If you have questions about hosting or short-term leasing your apartment, contact the Boston Licensing Board, Inspectional Services Department or other city agen- cies directly, or consult a local lawyer or tax profes- sional. You Must Register Anyone who hosts paying guests for fewer than 28 consecutive nights in Boston must register as a short- term rental operator with the city and fill out required documents with the Massachusetts Department of Revenue requirements in order to comply. Short-term rental hosts in Boston are also required by the city to obtain a registration number, which can be applied for on the city’s website. According to Airbnb’s Boston hosting fact-sheet, the website will ask you to pick a category type for your listing: • Home Share Units: Entire primary home listings where the host is not present during the stay • Limited Share: Shared/private rooms where the host is present during the stay •Owner-Adjacent: A full unit in the same 2-3 unit property where the host also resides In addition, you’ll also have to upload two docu- ments to verify your primary residence. Acceptable documents include: • Proof of residential exemption • Utility bill • Voter registration • Motor vehicle registration • Deed • Driver’s license or state-issued identification And if you’re a renter, you’ll also need to attach a letter of consent from your landlord to rent out your space to paying non-tenant guests. Short-term rental registration is good for one year, and costs $200 for Home Share Units and Owner Adjacent Units, and $25 for Limited Share Units. Once your application is processed, you’ll receive a registration number via email, which you must add to your listing on Airbnb. This process could take a few days. But Wait, There’s More… Once you receive your registration number, you can apply for your business certificate from the City Clerk’s Office via mail or in person. (The city will check for your registration number when they process your business certificate application, so it’s important to have a registration number before applying.) Mailed applications typically take one to two weeks turnaround; an in-person visit will get your certifi- cate back immediately. According to Airbnb’s Boston hosting factsheet, “As long as you have a registration number, you can continue to host while you wait for your business certificate.” You’ll also need to get the signature on your ap- plication notarized, which can be done at the City Clerk’s Office. Finally, hosts must add their license number to their listing to finalize their registration with the city. Once the number is added, the registra- tion will be complete, and you can continue hosting. Other Steps, Other Rules The City of Boston offers approved hosts a mail- ing tool to notify neighbors that the host’s listing is registered as a short-term rental, and advises hosts to send notifications within 30 days of registering. And speaking of neighbors...it’s also crucial for hosts to understand that in addition to city and state laws, there may be other binding contracts or rules in play, such as leases, condo board or co-op rules, HOA rules, or rules established by tenant organizations. Even if you’ve jumped through all the municipal and state hoops, it’s still your responsibility to look over your condo or HOA’s governing documents to make sure you’re not violating them by renting your unit on a homeshare platform. There may also be tax considerations when it comes to short-term rental income. In order to stay on the right side of these laws, it’s very much in your interest to consult a tax or real estate attorney to make sure you have all your i’s dotted and t’s crossed when it comes time to file with both the state and the Fed. Again, if you’re considering getting into the short- term rental game, it’s vitally important that you do it the right way; ignoring the rules, or even just neglect- ing to file the right form could result in serious—and expensive—legal consequences. So protect yourself, and contact the Boston Licensing Board, Inspectional Services Department, or other city agencies directly, or consult a local lawyer or tax professional.