Posts for : April 2014

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HOW TO STOP SHORT-TERM VACATION AND CORPORATE RENTALS

By Hanh Pham, Esq., Law Offices of Ann Rankin

 

Our firm has received many inquiries on how to stop short-term rentals from being posted on airbnb, which has recently become the most popular website in the Bay Area for advertising condominiums by the night or the week.

 

Short-term rental provisions vary depending on the declaration of covenants, conditions and restrictions (“CC&Rs”), but thirty (30) day or six (6) month minimum lease terms are the most common.  The purpose of these provisions is to reduce the use of residences for hotel or transient use.  Owners do not want homes in their community to be used as a vacation or corporate rental, which may generate excessive noise, late night parties, trespassing, increased traffic, and other disruptive activities.

 

Many of these advertisements are for high-end condominiums with close proximity to the beach, convention center, or downtown.  Owners rightly object to sharing desirable amenities such as a pool, spa, exercise studio and/or sauna with tourists and travelers.

 

Many associations want us to send cease and desist letters to airbnb.  Unfortunately, an association has no contractual relationship with airbnb, which is not bound by CC&Rs.  Thus, the association has minimal leverage to demand that airbnb cease from posting ads from the association’s owners and tenants.  They are similar to Craigslist and vrbo in that they do not have control over persons posting on their website.  However, the terms and conditions on airbnb’s website indicate that each host represents and warrants that a housing accommodation “will not breach any agreements” that the host has entered into with any third parties and will comply with applicable laws, tax requirements, zoning laws, and laws governing rentals of residential and other properties.  Hosts may not read or ignore these terms, which they expressly violate by renting their units in violation of the CC&Rs and local law.

 

In particular, Chapter 41a of San Francisco’s Administrative Code states that renting an apartment or home for less than 30 days is illegal in San Francisco unless you get a bed-and-breakfast permit. Violators may face a fine of up to $1,000 or six months in jail.  Airbnb rentals keep happening under the radar because they’re too hard to police.  Usually, neighbors report the possible violation to the association’s management.

Violations of the minimum lease term requirement can be addressed as would any other CC&Rs violation, by notice and hearing.  The board of directors (“Board”) can have management send the offending owner a cease and desist letter demanding that the owner take down the posting.  If the posting continues, the Board can send a violation notice and call the owner to a hearing in executive session.  If after the hearing the owner is found to be in violation, then the Board can impose a fine according to the fine schedule.

 

If fines do not curtail the rental activity, the Board may want to consider a suit for injunctive relief.  Before a complaint can be filed, however, associations must serve the offending owner with a request for resolution and offer to mediate the dispute.  If the owner accepts the offer to mediate, then mediation is held.  Often, mediation will resolve the dispute.  If it does not, then the association may file a lawsuit for injunctive relief.  If it prevails, then the court can order the owner to pay the association’s legal fees.

 

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