September 14, 2012

Airbnb: A Hit List For San Francisco Landlords Too

As we first noted in April, according to San Francisco Administrative Code Chapter 41A, it is "unlawful for any owner to offer an apartment unit for rent for tourist or transient use," defined as "occupancy for less than a 30-day term of tenancy."

From a renting reader yesterday who had used airbnb to sublet her apartment for transient use: "I've just got [an] eviction notice from my landlord citing Chapter41A!"

Airbnb: A Potential Civil And Criminal Penalty Hit List? [SocketSite]
Clarifying, And Perhaps Even Enforcing, Existing Rental Laws In SF [SocketSite]

First Published: September 14, 2012 11:30 AM

Comments from "Plugged In" Readers

How in hell is the city able to tell people who or how they are allowed to share their property?

San Francisco has some serious issues it needs to address and parking/shadows/bay windows are NOT the ones I'm talking about.

Posted by: Dick Jams at September 14, 2012 12:10 PM

This is a no-brainer move for the landlord. And I'm afraid the tenant has no defense and no judge would let the tenant slide. Bye bye.

The LANDLORD faces potential criminal and civil penalties if the TENANT rents out the place, in part or whole, on airbnb. No landlord should permit this and risk steep fines and even jail time. And no judge is going to side with the tenant in these circumstances.

Posted by: anon at September 14, 2012 12:15 PM

Dick - if you're a renter, it isn't you're property, and you should obey the rules of the lease that YOU signed.

Simple.

Posted by: Fishchum at September 14, 2012 12:15 PM

@dick it's pretty common in areas with strong hotel lobbies. Places like Martha's Vineyard, Nantucket, etc have laws on minimum rentals. Usually there are easy ways around it.

Posted by: scurvy at September 14, 2012 12:16 PM

^^^ It's a tenant who has shared the landlord's property through airbnb.

Say you have a rent-controlled tenant living in a place for $1K/month. He outgrew the place (married, has kids) but doesn't want to give up on his sweet deal, why would he? He figures he can sub-let the place for $3K/month through p2p rental sites like airbnb.

He moves out but keeps the place that should normally have been available to another tenant. These actions skew a bit more our already dysfunctional SF rental ecosystem.

Landlords are in their right to cry foul and ask for an eviction if that happens.

Posted by: lol at September 14, 2012 12:25 PM

"@dick it's pretty common in areas with strong hotel lobbies. "
"In addition, the owner may be liable for civil penalties of not more than $1,000 per day for the period of the unlawful rental."

Even if You Dont Agree with The LAw
It Aint Right to Make the Landlord Sweat $1000 per Day

Posted by: ReadingForRealtors at September 14, 2012 12:44 PM

This applies to more than renters... property owners as well. Again; the city, telling landowners how to use their property. I understand that there need to be certain restrictions to ensure the property isn't being used entirely inappropriately, but the idea that the city can actually restrain an owner from sharing the space is crazy.

To reemphasize my original statement: "San Francisco has some serious issues it needs to address and parking/shadows/bay windows are NOT the ones I'm talking about."

Posted by: Dick Jams at September 14, 2012 1:31 PM

"but the idea that the city can actually restrain an owner from sharing the space is crazy"

Nobody is saying an owner can't share their space. If you want to let people stay in your place go for it.

But once you charge them, then regulations (correctly) come into play. Nothing new here.

Posted by: R at September 14, 2012 1:51 PM

can i assume this law applies to vacation swaps? say I want to go to London, and trade my apartment for theirs for a week? No money changes hands - but does that matter?

and if "sharing their space" is OK - then how does one prove you accepted money? is it the mere fact that one listed it for lease on vrbo or airbnb?

Posted by: tuneinto at September 14, 2012 2:29 PM

One of the serious issues that need to be addressed is that some folks sleep through required high school civics classes and college history classes.

Municipal governments can and always have had, since the Tenth Amendment of the United States Constitution gave them that power, to limit and/or regulate an individual’s right to use land. I'm not a lawyer, but limiting or even outlawing owners of property from operating informal hotels is clearly a valid exercise of local authority.

That's how the hell the city is able to tell people who or how they are allowed to share their property.

Posted by: Brahma (incensed renter) at September 14, 2012 2:30 PM

tuneinto,

Ordinance reads:

"It shall be unlawful for any owner to offer an apartment unit for rent for tourist or transient use."

If no money changes hands, then there is no "for rent." Yes, I know, someone might argue that receiving any in-kind "rent" counts, like a vacation swap, but you'd never, ever get prosecuted for that. Statutes like this are interpreted in favor of the one being charged.

Posted by: anon at September 14, 2012 2:34 PM

I am aware of an similar case on the 700 block of Sanchez street where a rent-controlled tenant, renting to tourists by using AirBNB, was evicted.

The landlord used the online advertizing, and neighbors testimony of seeing suitcase wheeling tourists as proof.

As it turns out the "renter tenant" lived in another rent controlled apartment in the City and used the Sanchez property for AirBNB type tourist rentals.

Posted by: Jackson at September 14, 2012 2:59 PM

anon says: If no money changes hands, then there is no "for rent." Yes, I know, someone might argue that receiving any in-kind "rent" counts, like a vacation swap, but you'd never, ever get prosecuted for that.
I've always wondered about the vacation swap. In the internet age, we're one click away from the 'old school' person-to-person vacation swap transitioning to a website that credits you for 'hosting guests' and then allows you to use these credits when you go on vacation and stay in some else's home. With crackdown's in major metro areas (SF, NYC) I wouldn't be surprised to see someone (perhaps AirBnB) fill the void with a cashless transaction (though a fee would go to the facilitating site). Anyone want to weigh in...

Posted by: EBGuy at September 14, 2012 3:30 PM

"If no money changes hands, then there is no "for rent." "

If a Guy does Work in Lieu of paying Cash Rent
Does SF Rent Control still apply

Seems Like that Must Hvae Come up Before

Posted by: ReadingForRealtors at September 14, 2012 3:38 PM

I suppose the airbnb lessor could accept 'donations' rather than require payment...kind of like an escort does.

Posted by: anon at September 14, 2012 4:40 PM

So is the eviction notice based on #4 of the 15 Just Causes for Eviction?

4. The tenant is using the unit for an illegal purpose;

btw - the donation or "consulting fee" is a good idea...

In my opinion, Hard for the landlord to win this one. Is there any precedent?

Posted by: ohyeah at September 14, 2012 7:20 PM

Wasn't there a bounty of sorts? Who collected??

Posted by: BillyBalls at September 14, 2012 8:39 PM

You are all missing the point. All cities, etc. Issue certificates
of occupancy based upon zoning regulations. Single family apt, guest house, hotel, B&B. You can't operate a convenience store in your apartment! Also other tenants in the building have a reasonable expectation of the use of the other units.

Posted by: Park at September 15, 2012 3:36 AM

What is the point here one must ask? A landlord is quite smartly using a lease clause to terminate a contract that was violated. Is anyone among us surprised that a landlord would use such tactics to evict a tenant with how high rents are right now!!!! Most any lease is going to cover unauthorized subleasing arrangements. 41A seems to just be another arrow in the landlord quiver. I am most suspicious of the original post. It has the appearance of coming across like bait. And it was taken hook, line and sinker as they say.

Posted by: LuckyLuck at September 15, 2012 9:29 AM

is it the mere fact that one listed it for lease on vrbo or airbnb?

That would be a pretty good hint.

ReadingForRealtors

Could use SpellingAndCapitalizationForRealtors.

Posted by: justme at September 15, 2012 2:07 PM

Presumably, the tenant received an eviction notice for violating a "no subletting" clause in their lease, not for illegal use of the premises. But there would be several other remedies available to a landlord who discovered their rent-controlled tenant was using airbnb to profit. They could file a 1.21 petition with the rent board to deregulate the unit since there's no permanent tenant in occupancy, they could argue that the unit is exempt from the Rent Ordinance all together as it's being used for commercial purposes, they could sue for fraud or unjust enrichment. The law overwhelmingly favors the landlord in these circumstances. Not to mention, the Rent Board Rules allow a subtenant to petition for reimbursement of rent paid if the subtenant pays more than their proportional share of the total rent paid to the owner (see Rent Board rule 6.15C and Rent Ordinance section 37.3). And there's always the risk that the Airbnb tenant won't move out - the leaseholder would be without any legal means of evicting them. Bad, bad idea for rent-controlled tenants.

Posted by: long-time renter at September 15, 2012 2:43 PM

My brother had an airbnb exec renting an apartment from him in the early days of the site. His apt had a non sublets clause. She put the place on the site, rented out the two bedrooms practically every other night, and was making more than she was paying in rent until we kicked her out. Only found out cause other people in the building started asking us why there were new strange men coming out of her apartment every night. Needless to say there were various theories circulating....

Posted by: Jack at September 15, 2012 7:53 PM

Another reason why we need to build more housing for residential, office, and hotels (tourists)!!! The cost-of-living is so high in this city, so we need to build up supply by adding density downtown and along major transportation corriders. These problems will continue without adding necessary housing. We also need to repeal Prop 13 and rent control, which screw with market dynamics.

Posted by: MarinaRenter at September 17, 2012 12:29 AM

"It is unlawful for any owner to offer an apartment unit for ....... transient use"

Note, of course, the same does not apply if the "unit" is a sidewalk and the owner is the city of SF.

Posted by: wrath at September 17, 2012 5:03 PM

Hotel tax, health codes/inspections, etc... all are a part of running a hotel or B&B, right?

Our condo CCNRs specifically state that units can be rented out for less than 30 days, which is great for me. I suspect a lot of my neighbors would list their units on airbnb if not for that.

Posted by: joh at September 18, 2012 12:31 PM

Airbnb guests spent $56 million in San Francisco

Great article on the positive net contributions of Airbnb on the local economy. Mayor Lee chiming right in with his support. No mention of 41A and the Hotel Council of San Francisco begrudgingly recognizing the impact of this phenomenon on communities outside the 'hotel district'.

http://www.bizjournals.com/sanfrancisco/blog/2012/11/airbnb-san-francisco-tourism-hotels.html?ana=e_du_pub&s=article_du&ed=2012-11-09&page=all

Worth a read if anyone is interested. The report is obviously sponsored by Abnb so its bias will be (and should be) questioned. But interesting data no matter how you skew it.

Posted by: eddy at November 12, 2012 10:44 AM

I'm a renter in SF who benefits greatly from Rent control. I also travel frequently and have made good use of Air BnB both domestically & abroad. I have to say that tenants of rent controlled apartments in SF who are subletting these apartments through AirBnB, VRBO, etc. are acting unethically and in bad faith. Rent control is in effect to keep dwellings affordable, not to profit off of.

Posted by: cks at November 24, 2012 6:03 PM

Funny story, this $1k a day nonsense you're talking about has NEVER been levied. Its a law similar to not sleeping on refrigerators or the 80% carpet rule in SF - the mayors office is refusing to prosecute these cases because its just not tenable.

I feel like everyone here operates on worst case scenarios. You know nothing about the AirBNB community so you just assume every single one is out to cheat the system - if you look at the numbers the abusers are infinitely small. 13% of the listings in SF are full apartment rentals and the vast majority of those are from rental companies that offer vacation rentals. If AirBNB didnt exist they would stil continue to list their properties elsewhere on other sites. You're just getting mad that a platform for doing this is getting popular. I dont hear any cries to shut down craigslist because people have been listing their properties on there for tourists for a decade now.

Posted by: John at February 11, 2014 12:44 PM

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