Want to get out of town for a few days but don’t want to spend an arm and a leg on a boring hotel? Try Airbnb! Airbnb is an online marketplace that connects property owners looking to rent their property to people looking for accommodations. As touted on the Airbnb.com, “Through their experiences on Airbnb, guests and hosts build real connections with real people all over the world”.

It is one of those rags to riches, American dream stories. It all started in 2007 when designers Brian Chesky and Joe Gebbia were having trouble making ends meet in San Francisco. A design conference was coming to town and hotel space in the city was limited. Brian and Joe came up with the idea of renting out 3 air mattresses in their San Francisco loft and acting as host to their guests. A website was created and they booked the floor space to three separate people for $80 a night. Airbnb was born. From this humble beginning, Airbnb has grown into a $25.5 billion dollar company.

Its success, however, has not been unhindered. Airbnb has left a string of legal woes in its wake. It has run afoul of the housing laws in New York City, which prohibit short term rentals of apartments. It has also been found to be in violation of the hotel taxes and laws in other municipalities. In 2014, the government for Barcelona, Spain fined Airbnb €30,000, roughly the equivalent of $40,000 for violations of the local tourism laws. Cities across the world have been actively passing legislation aimed at curbing rentals through Airbnb, on the grounds that it has caused an increase in rental rates and has further impacted revenue generally relied upon by the hotel and tourism industry.

On a more local level, Airbnb has been causing quite a stir, particularly amongst some of the well-situated metro-Atlanta condominiums. Owners have jumped on board with the idea of making some quick bucks through short term rentals. However, in doing so, the owners are usually violating the governing documents from their building. Airbnb rentals are becoming increasingly common, and with them come new questions and problems.

One of the first questions that is asked by board members and managers is “How can we tell if someone is listing their unit on Airbnb?” You can expect that an owner who is leasing his or her unit on Airbnb isn’t exactly going to advertise the fact around the building. Given the short term nature of most of the rentals, an owner can be renting out his unit for months before anyone notices something strange going on. Airbnb does not, as a practice, put the name of the condominium building in the listing, nor does a search under the condominium name often yield a result.

However, there is a way to at least narrow the search. The Airbnb website does allow a user to search by general location. If a street name, such as “Peachtree Street N.E., Atlanta, Georgia” is typed into the search engine, the website will show a map with pinpoints to available accommodations. In many cases, board members and managers can often find listings for their building through this featureand can confirm through the pictures, as most of the listings will include pictures of the accommodation. If a manager or a board member finds a listing for a unit within their building, he or she should document the listing with screen grabs of the listing and for all the reviews. The reviews often will help provide a time frame for when the rentals began. By getting a hard file of the listing and reviews, the Association can help preserve documentation to back up any enforcement measures, should the owner decide to delete the listing and deny any knowledge of its existence.

Once it is discovered that an owner is renting on Airbnb in violation of the governing documents the next question becomes: “What can we do about it?” Many times, a board will want to pursue the violation with Airbnb directly, or to get Airbnb to pull the listing. This route may not be the quickest way to address the problem. Airbnb has a policy that all “hosts” must comply with all laws and building regulations, but as of today, it does not appear much is being done by Airbnb to enforce this policy.

Rather, the answer to enforcement is going to be dependent on the governing documents for the condominium. Here are a few key provisions to look to in enforcing against an Airbnb rental:

  • Leasing provisions. In general, many condominiums in the metro-Atlanta area have very similar provisions governing the leasing of units within the condominium, capping the number of units that may be leased and imposing permit requirements to lease. Most of these leasing provisions prohibit the rental of a portion of a unit and/or state that a unit must be leased for a minimum of one year.
  • Transient tenant provisions. Some governing documents have provisions specifically prohibiting transient tenants, defining transient tenants as those who occupy a unit for less than 30 days. This provision would be on point in enforcing the standard short term Airbnb rental.
  • Business use of units. Most condominium documents will prohibit any operation of a business out of a unit which is detectable by sight or sound, or which causes an increase in flow of traffic, or increase use in the common elements.

It should be noted, however, that most sets of covenants were not written with websites like Airbnb in mind. Accordingly, depending on the specific language of the covenants, there may be any number of loopholes that can be argued by an owner as to why the Airbnb rentals are not a violation of the covenants. For example, a standard definition of leasing in many condominium documents is the “regular, exclusive occupancy of a unit by a person other than the record title owner”. This definition of leasing leaves open the argument that sporadic three day weekend rentals to different persons does not constitute regular, exclusive occupancy, so the activity of renting on Airbnb does not fall within the definition of leasing in violation of the documents. Likewise, the standard business use provisions leave open the argument that sporadic rentals do not rise to a level of a significant increase in traffic or that it is easily detectable.

Given the fact that most governing documents for condominiums in metro Atlanta were written before the meteoric rise of Airbnb and just like all the cities across the world adopting new legislation to address short term rentals, associations across metro-Atlanta should look at adopting new covenants to specifically address short term rentals and/or the listing of a unit for rent on websites such as Airbnb. Whether the residents in a building view the services offered by Airbnb or similar websites as positive or negative, having a covenant approved by the membership addressing short term rentals will help set the expectations for the community.

It is reasonable to expect that there will be continuing legislation that will affect the availability or the number of Airbnb listings in cities across the country, including Atlanta. Until then, however, associations should be prepared and have a plan for addressing short term rentals in their building.