Your Money: A Warning for Airbnb Hosts, Who May Be Breaking the Law

But when he returned from a three-night trip to Colorado, he heard from his landlord. Special enforcement officers from the city showed up while he was gone, and the landlord received five violations for running afoul of rules related to illegal transient hotels. Added together, the potential fines looked as if they could reach over $40,000.

Mr. Warren, like many if not most Airbnb users, hadn’t read the terms and conditions on Airbnb’s Web site telling him not to break any laws (while also wiping the company’s hands clean of responsibility for hosts’ compliance with those laws).

So he gulped hard, begged his landlord not to evict him and told him that he’d attend the mandatory administrative hearing related to the violations and pay any fines. Then, he gulped harder and hired a lawyer for $415 an hour.

He also fired off a note to Airbnb, which collects the nightly fee on behalf of its hosts and keeps a bit for itself. Given that the company knows good and well that many of the hosts on its site who live in big cities are violating the rules, he said, why not warn people more explicitly about the kind of trouble they could find themselves in? “By ignoring local laws, you are making casualties of the very people you need to make your site a success.”

From the perspective of an Airbnb customer who needs someplace to stay — and I count myself among the growing numbers of satisfied Airbnb customers — its service pushes every possible consumer pleasure button. You beat the system by avoiding high hotel rates, get to stay in neighborhoods where there aren’t hotels at all and can connect with plugged-in local hosts, too.

But all airy talk in tech start-up circles of “collaborative consumption” and “the sharing economy” aside, five-figure fines and the possibility of eviction are no joke for those hosts. In fact, local laws may prohibit most or all short-term rentals under many circumstances, though enforcement can be sporadic and you have no way of knowing how tough your local authorities will be. Your landlord may not allow such rentals in your lease or your condominium board may not look kindly on it.

Mr. Warren, 30, acknowledges that he broke the city rules and did not read his lease to see if this sort of subletting was kosher. Ignorance of the law is no excuse, even if Airbnb avoids educating the people who provide its inventory.

But one enduring mystery for him was why the city came after him in the first place. He was not renting out his bedroom all that often, after all.

Still, he was breaking the law. And that law says you cannot rent out single-family homes or apartments, or rooms in them, for less than 30 days unless you are living in the home at the same time. Popular Airbnb markets like San Francisco and New Orleans have even more restrictive rules, and London and Paris have their own ordinances. People who want to go through the official licensing process for inns or bed-and-breakfasts have that option if they so choose.

That said, New York City officials don’t come looking for you unless your neighbor, doorman or janitor has complained to the authorities about the strangers traipsing around. “It’s not the bargain that somebody who bought or rented an apartment struck, that their neighbors could change by the day,” said John Feinblatt, the chief adviser to Mayor Michael R. Bloomberg for policy and strategic planning and the criminal justice coordinator. The city is also concerned with fire safety and maintaining at least some availability of rental inventory for people who actually live there.

Since the mayor’s office of special enforcement began looking at the short-term rental issue in earnest in 2006, it has received more than 3,000 complaints, conducted nearly 2,000 inspections and issued nearly 6,000 notices of violation.

On Thursday, Mr. Warren became one of the lucky violators. He arrived on the 10th floor of a city building in Lower Manhattan expecting to take his lumps during a hearing and write a large check. Instead, he discovered that the buildings department never filed the proper paperwork with the Environmental Control Board, which runs the hearings. A clerk there dismissed all violations against him with no fines, and I could see the color coming back into Mr. Warren’s face.

This article has been revised to reflect the following correction:

Correction: November 30, 2012

An earlier version of a picture caption with this article misstated the legal jeopardy faced by Nigel Warren for renting out his bedroom. His potential fines totaled $40,000 before the case was dismissed; he is not currently fighting $10,000 in fines.

Article source: http://www.nytimes.com/2012/12/01/your-money/a-warning-for-airbnb-hosts-who-may-be-breaking-the-law.html?partner=rss&emc=rss