Top 3 Legal Questions If You Rent or AirBnB Your Home
If you provide temporary rentals via services like AirBnB and VRBO (Vacation Rentals by Owner), not being aware of the legal liabilities can result in severe financial consequences. For instance, if someone is injured in your rental property, or you fail to abide by local laws, the financial liability could significantly eclipse any of the monetary benefits. If you are re-renting property that you rent, you may lose your security deposit or even face eviction.
Whether it's your first time renting out real estate or you've been in the business for a while, being informed and prepared can help to ensure that even when things go wrong, you won't be left in the lurch. Below are the top three legal questions people ask when they want to rent out their home to short term renters.
1. Can I Re-Rent or Sublease the Unit I Rent?
If you rent or lease your home, your ability to use a service like AirBnB will be limited by the lease agreement with your landlord or property management company and by local landlord-tenant laws. Similarly, if you're a homeowner wanting to convert your home to a rental property, you may have to abide by a HOA that limits your ability to provide short-term rentals. Your municipality may not even allow short-term rentals in the first place.
Often, local laws in a given municipality prohibit or limit the ability to offer short-term rentals. In certain cities, local ordinances will either limit the number of days, or require permitting, for homeowners to provide short-term rentals. For example, New York City prohibits short-term rentals/subletting of less than 30 days, and San Francisco requires AirBnB users register with the city before they can accept renters.
2. Death at an AirBnB: Who's Liable?
This might sound like an extreme case, but it happens. When someone dies or is injured in a short-term rental unit, there could be liability to the owner. Generally, landlords (including "hosts" on sites like AirBnB) must ensure that their properties are safe for renters. Dangerous conditions could expose owners and landlords to legal liability for injuries caused by those conditions.
Although AirBnB does provide some limited insurance coverage to users on both ends, it's best for your liability and peace of mind to make sure that such coverage is sufficient, or otherwise to supplement it with additional coverage. Make sure your insurer knows you are providing short-term rentals when applying for coverage, as many policies will not cover this unless explicitly approved.
It's also a good idea to screen potential tenants with some combination of a rental application, credit check, background check, or whatever screening process AirBnB or VRBO allow you to follow. No amount of rental income is worth the liability that can come from risky tenants. The more information you can get about prospective tenants before they move in, the better. You can read more about the top mistakes landlords should avoid here.
3. Can I Sell My House While Someone Is Renting It?
If you want to sell your home while it is currently being rented, you may run into some logistical issues. Depending on the agreement with your renters and the type of rental, your ability to show the home to prospective buyers may be limited, as well as your ability to stage and control the property's interior appearance during the time they are occupying it. Additionally, the value of the property may be affected, since any purchaser will also be purchasing the property subject to the rental agreement's terms. It's important to familiarize yourself with the local tenants' rights and housing laws before you try to sell a rental property.
- Premises Liability: Who is Responsible? (FindLaw's Learn About the Law)
- Can I AirBnB My Apartment? (FindLaw's Law and Daily Life blog)
- Landlord Tenant Law (FindLaw's Learn About the Law)
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