Airbnb And The Multifamily Housing Industry ‘The Saga Continues’ Airbnb is Now Locked in Legal Battle With Mega-Landlord AIMCO

Although Airbnb has faced challenges and resistance from municipalities around the world since it launched nine years ago, companies that have been affected like hotels, travel agents and the like have primarily limited their unhappy and critical responses to complaining and negative publicity about the Airbnb business model of short-term sublet rentals. To date, Airbnb has faced a number of legal skirmishes with municipalities and multi-housing apartment providers in selected markets with varying results. But that may be changing as Denver based AIMCO (Apartment Investment & Management Co.) one of the largest residential landlords in the world has filed suit against Airbnb in California and recently revised its complaint in LA to sue on behalf of all owners of apartment complexes across the U.S. where landlords forbid sublets and whose units were illegally subletted through Airbnb. Last month AIMCO also sought a court order to prohibit Airbnb from doing business with its tenants until the case is decided.

This legal move by AIMCO could have a serious impact on the size of Airbnb’s inventory of short-term rentals if the judge makes a ruling that they are violating the law by helping renters break their lease agreements. In its filing, AIMCO makes the argument that Airbnb does a lot more than just provide a platform for property listings, and that it should be held to account as a broker of short-term rental agreements and a processor of payments. Airbnb counters this argument with the contention that federal law gives Internet Companies immunity for content others post on their sites.

Although this case has the potential to set a precedent on subleasing law that could hurt or help Airbnb and other short-term rental sites, it will probably not be the final word on legal challenges between apartment owners and Airbnb.

According to National Multifamily Housing Council spokesman Jim Lapides, “It’s a lively debate inside the industry and opinions within the apartment industry run the full gamut from a total embracing of home sharing to complete opposition.” A recent survey by the trade organization showed that 49 percent of renters under the age of 25 are interested in the opportunity to generate extra income through home-sharing, compared with 15 percent of renters older than 65. A fact that underscores the risk landlords could run in alienating millennials by going hard against Airbnb. On the other hand, many non-millennial renters have less than favorable attitudes about their communities being open to short-term transient renters who are not well screened and are frequently seen as a disruptive presence in their communities. These disruptions, in many instances, have led regular tenants to pack their bags and move. This attitude is reflected in an online review that a former AIMCO resident wrote that was included in their recent court filings. The resident stated “We will move out because it’s (their apartment community) inundated with Airbnb and it’s no longer a private residence but a hotel or a Motel 8 since Airbnb does not have quality guests.”

All apartment communities should determine their policy regarding short-term subletting on their properties and residents should be informed about your clearly defined policies and procedures in addressing this growing situation in the rental industry. The challenge of dealing with Airbnb or any other short-term sublet rentals on your property is only going to escalate with the increased popularity of Airbnb. There is an emerging and growing ”˜underground short-term sublet industry’ within the apartment rental industry with some people leasing multiple apartments to make a living from short-term rentals. This is an established fact that all leasing agents should know. Because Airbnb listings are anonymous and hosts have become savvy to avoid detection of illegal sublets, it can be difficult if not impossible to link an Airbnb listing to a specific unit. Airbnb hasn’t been totally unresponsive to complaints by landlords and has started a “Friendly Buildings Program” that keeps owners abreast of the home-sharing activities on their property. However, according to AIMCO, the hitch is that the information is only available to landlords who allow subletting.

Airbnb and its copy-cat clone companies are not going away so you need to decide if this is an issue you want to deal with in your community or not, and determine how you are going to handle it.