The Rise of Airbnb What Condo Associations Need To Know About Short Term Rentals

Instances of home-sharing have skyrocketed recently due to the rise of websites such as Airbnb.com.  For a small fee, these websites connect homeowners with people who want to find a place to stay for one night at a time. Homeowners rent their entire home or even a single bedroom therein, for a profit. But conflicts arise when the homeowner is the owner of a condominium unit because the unit owner’s decision to rent out the unit may not be permitted under the condominium bylaws.

Associations: Be Wary of Short Term Rentals 

The rise of Airbnb.com raises significant concerns for condominiums. First, there is the issue of safety within a shared living space. When a condominium is rented, the renter gains access to facilities such as common areas. The Airbnb.com renters are not responsible for maintenance fees, and may misuse equipment or take advantage of amenities reserved for homeowners.  

Another concern is whether a transient renter is covered under the condominium’s master insurance policy. If a transient renter gets hurt within the common areas of the building, or causes property damage, it is unclear if the policy provides coverage. In addition, some insurers may consider short-term rental units as being used for commercial purposes, which may not be covered under the policy. The practice also raises concerns with government officials regarding how home-sharing impacts local zoning laws and whether the practice can be taxed.

A Boston-Area Condo’s Struggle

Our firm recently was retained by the condominium trust of a small condominium building after residents noticed that one unit was being rented out via Airbnb.com. The unit owner was providing the renters the building keys by leaving them in an outdoor lockbox. The key allowed the renters access to all the common areas including the hallways, basement, lobby and roof. The renters were never accompanied by the unit owner. 

The condominium association had concerns about the unit owner’s continued rental of the unit. First, the renters would cause increased liability exposure because the condominium’s insurance coverage was meant for a building occupied by owners and tenants under long term leases. Second, some of the renters were rowdy and intoxicated and some residents complained they no longer felt safe. Third, the renters were smoking on the rooftop near the dryer vents, which caused toxic fumes and put the building at risk of fire.   

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