Airbnb & Short-Term Rentals: Protecting Multi-Family Buildings and Residents

The rise of the sharing economy is boosting platforms like Airbnb, VRBO, and HomeAway, which offer people the ability to rent out their homes on a short-term basis. This trend is having significant effects on multi-family buildings across North America. Here’s a strategic approach for condo boards and strata councils to safeguard their properties.

Why Short-Term Rentals are Thriving

Short-term rentals offer attractive benefits for both travelers and property owners. Travelers gain unique and affordable lodging experiences, while property owners can earn additional income by renting out their spaces. This demand is particularly strong in cities with high hotel prices, such as New York City, San Francisco, Vancouver, and Miami.

The Risks of Temporary Residents

Despite their popularity, short-term rentals pose challenges for multi-family building administrators. Unauthorized occupants can compromise building security and violate established rules, impacting the safety and comfort of residents and staff. Additionally, these temporary visitors might generate noise, contribute to wear and tear, and potentially damage communal areas, reducing the overall quality of life in the building.

Many buildings already have regulations in place prohibiting short-term rentals, often defined as rentals lasting fewer than 30 days. However, some existing by-laws or lease agreements may not specifically address short-term leasing because such platforms were not widespread when the rules were established.

Legal Challenges

In various cities, short-term rentals are outright illegal. For example, New York City’s laws bar condo owners or tenants from renting out properties for less than 30 days, threatening eligibility for certain tax benefits if violated. Nevertheless, illegal subletting remains a common problem.

Condo boards and strata councils are justifiably concerned. To combat this issue, some buildings impose hefty fines for short-term rentals and work to enact by-laws explicitly banning the practice. A property management company can be an excellent resource for boards seeking professional advice, and consulting with an attorney can clarify legal recourse.

Understand Governing Documents

Board or council members should thoroughly understand their building’s by-laws concerning leasing terms. If the rules are vague, legal consultation is recommended before making amendments.

Impose Fines

Should short-term renting occur, imposing fines is an effective deterrent. Penalties can be substantial and may include additional fees to cover legal expenses if enforcement action is necessary.

Restrict Unauthorized Entry

Ensure that the front-desk team and all building staff are instructed to deny access to strangers or unauthorized guests unless the owner is present or they have written authorization. If unauthorized guests do enter, taking immediate and appropriate action is essential.

Document Visitors

The responsibility of the front-desk staff includes detailed records of all visitors, especially short-term renters. This documentation can support legal actions against unit owners if needed. Management software can facilitate this process.

Provide Education and Training

Educating and training residents and staff is crucial for building consensus and awareness of the issues surrounding unauthorized rentals. Staff should be well-versed in handling unauthorized guests, potentially via resources or training sessions offered by the property management company.

It’s also important to inform residents, unit owners, and stakeholders about the risks of illegal short-term rentals. Encourage them to report any unauthorized visitors to the management team, ensuring the building remains a secure and pleasant environment.

As Airbnb and similar platforms continue to grow, implementing these strategies can reduce the risks associated with short-term rentals and protect both residents and property investments.