Homesharing and Insurance What Your Board Should Know

Long before Airbnb became a household word, attorney Frank Flynn was dealing with condominium owners who thought that turning their units into a bed and breakfast was a great idea. “It’s a terrible idea. You get all these people coming and going, wandering into the building,” says the managing partner of the Boston-based Flynn Law Group.

But in a city like Boston, where even the most profligate among us may shed a tear or two at hotel room prices, the homesharing trend has grown by leaps and bounds, with more co-op and condo owners than ever renting out their units to short-stay vacationers —and pocketing more than a few extra bucks in the process.

Led by Airbnb, homesharing has had a steady ascent over the last eight years or so since the company’s founders stumbled on the idea of renting out residential units in popular vacation destination cities to travelers in town both for business and recreation. As lucrative as the business can be for homeowners, it is also fraught with huge risks, including breaking proprietary leases, breaking state and city laws and facing significant uncertainty with regard to issues of insurance and liability.

A Risky Money-Maker

“Liability? Oh yeah. You’ve got strangers in your building. You don’t know if they’ve been screened. What if they attack somebody?” Flynn asks. “The liability could be huge.” And that’s just the beginning of the potential liability for owners and associations.

The popularity of joining Airbnb continues to climb, despite the fact that many, if not most, condominium documents prohibit short-term rentals. For the most part, it seems that people have been willing to turn a blind eye to potential problems for participating unit owners and their associations. In a small building, for example, where the neighbors all know one another and a fair number are renting out to Airbnb visitors without incident, the practice could go on undisturbed for years.

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