Short-term rentals, like three day old fish, stink - by Jeffrey Turk

Jeffrey Turk Esq., Turk and Quijano LLP

Benjamin Franklin famously quipped, “Guests, like fish, begin to smell after three days.”  Apparently, Ben Franklin didn’t know about Airbnb, VRBO, and the other websites that now allow you to find accommodations around the world at discount prices.  Whether you want a mountain top getaway or a couch in downtown Boston, these new sites offer a wide array of options for savvy travelers.  Sounds great…until you realize that short-term rentals create serious problems for apartment owners and managers.  So what’s the big deal?

One of the primary responsibilities of property management is to insure the safety and security of the residents.  As a result, managers expend significant time and resources to screen potential residents to insure, as much as possible, that these individuals will be able to comply with their leases.  This process usually includes performing a credit check, criminal background check, and prior landlord references.  The purpose of this screening is to exercise due care in order to avoid allowing convicted felons and other “undesirable” residents from entering onto the property.  Managers also go to great lengths to insure that keys are only provided to residents and not shared with third parties.  Many security experts will tell you that the most important security device in a property is the front door lock.  Thus, insuring that this lock remains secure, and that only residents have keys, is paramount.  Of course, when a resident leases out an apartment on a short-term basis, and provides a key to an unknown person, that wall of security crumbles.  This new “occupant” has never been screened, may have a serious criminal background, and has now been allowed to freely enter the building and wander the halls.  We have no way of knowing whether this person is practically perfect like Mary Poppins, or is a convicted sex offender that was just released from prison.  Clearly, allowing residents to lease their apartments on a short-term basis creates a significant security concern both for the management staff and other residents.  It is likely the greatest safety issue facing property owners today.  Beyond these security concerns, short-term rentals create issues of income fraud for affordable housing, where we have seen tenants paying $300 per month leasing out their apartments for $300 per night!  Likewise, recent news reports have documented that Airbnb rentals are being used for criminal purposes, such as prostitution and the filming of pornographic movies.  Not exactly the marketing plan any property wants to use!

Unfortunately, many leases, some drafted prior to the invention of the internet, fail to prohibit this use.  In a recent Massachusetts Appeals Court decision, the Court found that the taking of roommates did not constitute the “leasing” of the apartment, but instead was more akin to a “license”. Thus, even though the person was receiving compensation for allowing another individual to reside in their apartment, the Appeals Court did not consider this behavior prohibited by the restrictions imposed by the BRA in that case. 

The good news is that there are some easy ways to deal with these issues and insure that your property does not turn into the “no tell motel”.  First of all, take a look at your lease.  Be sure that in addition to prohibiting “sub-letting” or “assigning” the lease, it also specifically prohibits both listing the apartment on the internet, as well as permitting occupancy of the apartment on a short-term basis.  Your lease should prohibit the resident from advertising or posting the apartment for any form of use on the internet without written permission from the landlord.  Likewise, it should prohibit the resident from allowing any person to use the apartment, for any period, in exchange for any form of compensation.  Thus, while the resident is clearly permitted to have overnight guests, the receipt of any form of compensation renders the use improper regardless of whether this person is a ledger, boarder, roommate, or otherwise.  Additionally, the resident should be expressly prohibited from allowing any person to possess a key to the apartment.  While this may already be a general provision of your lease prohibiting “subletters and assignees”, it is important to insure that this provision is included in the lease to prohibit all such occupancies.  In addition to lease provisions, we have found that residents need to be informed that such short-term rentals are prohibited, and of the serious issues that they present.  We have found that many residents, when confronted with this violation, suggest that they had no idea either that the use of Airbnb was prohibited or the concerns it raised.  Thus, educating the residents will likely prevent some of the issues and may also result in residents reporting potential violations they observe.  Of course, in cases where residents refuse to abide by these restrictions, it may become necessary to terminate the tenancy and/or, in appropriate circumstances, seek a court order requiring the resident to cease the behavior and remove the posting from the internet.  We have successfully obtained such orders, which both protect the property and residents while also bringing the violation to a swift conclusion.

Jeffrey Turk, Esq. is the managing partner with Turk & Quijano, LLP, Braintree, Mass.