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Businesses The Almighty Buck

Landlords Want a Share of Renters' Airbnb Revenue (thestack.com) 197

Posted by timothy from the you-bet-they-do dept.
An anonymous reader writes: A group of leading U.S. property owners, including AvalonBay Communities and Camden Property Trust, have met with lodging rental site Airbnb to discuss ways that they can get a cut of their renters' income. The tech company has faced obstacles to its growth, with residents putting their leases in jeopardy by renting out their places to Airbnb users as temporary accommodation – a form of illegal subletting. A future agreement between owners and tenants could mean renters no longer need to take a risk when letting their apartments on the site.
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Landlords Want a Share of Renters' Airbnb Revenue More

Landlords Want a Share of Renters' Airbnb Revenue

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  • Seems reasonable (Score:5, Insightful)

    by plopez ( 54068 ) on Thursday December 17, 2015 @05:12PM (#51140019) Journal

    If you are renting it is not your property.

    • Re:Seems reasonable (Score:5, Informative)

      by Anonymous Coward on Thursday December 17, 2015 @05:16PM (#51140041)

      It is not that simple you have rights as a renter. You may not have the right to sublet however.

      • Re:Seems reasonable (Score:5, Informative)

        by mjwx ( 966435 ) on Thursday December 17, 2015 @07:25PM (#51140749)

        It is not that simple you have rights as a renter. You may not have the right to sublet however.

        This.

        That means you may not use the property as a commercial enterprise. To me, owners asking for a cut is a very, very fair compromise on that rule.

        Before some smart arse pipes up and says "but it's no different to having a home office", first let me say, you're an idiot because it's completely different. As a home office you're running a business out of your abode, as an AirBNB you're running your abode AS A BUSINESS.

    • Re:Seems reasonable (Score:4, Insightful)

      by Anonymous Coward on Thursday December 17, 2015 @05:19PM (#51140057)

      The right to sublet is often standard in rental agreements.

      The owners are already getting a cut. It's called rent.

      • Re:Seems reasonable (Score:5, Insightful)

        by AuMatar ( 183847 ) on Thursday December 17, 2015 @05:24PM (#51140095)

        Standard? I don't think I've ever signed a lease that didn't explicitly forbid it- its a pain in the ass for the landlord and can lead to difficult 3 way legal issues. I can especially see a landlord not wanting it done for short term leases- a normal sublease is annoying, who to sue when you have a contract with one person who subleased it for 3 days each to a half dozen people via a 3rd party website? No thank you.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          It's standard in many places where month-to-month leases basically don't happen. Who wants to move and still have to pay for eight months of a lease?

          • Re: (Score:2)

            by AuMatar ( 183847 )

            Generally you have a termination clause- termination of the lease in exchange for 1 or 2 months rent at any time. Or you work with the landlord, most will be flexible and transfer a lease. But almost all leases include no sublet clauses, most of the sublets you know are probably doing so illegally. In a place where landlords have so much market power they won't do a month to month there's no way in hell they'd allow you to sublease which is even worse for them.

      • Every single rental agreement I every used always forbid subletting. The was the number one thing they would point out to make sure no one made any mistakes. Some other places I did not rent did allow subleases but you had to get a sublease form filled out and approved. Landlords do not want strangers staying in their properties without having a legal agreement.

        This is not about money, the "cut" does not matter. What matters is that it is NOT the renter's property.

        Look at it like a rental auto. You can

        • Look at it like a rental auto. You can not let any of your friends drive your rental, even if the rental agency is getting a "cut".

          That's for insurance purposes. They allow you to add whoever you want as an authorized driver, you just might have to pay more.

          Landlords do not get to prevent "strangers" from staying in their property. I can invite over whoever I want to stay in a place I am renting, nor do I have to even be there at the same time. It is only when it is for money that it counts as subleasing, and lease contracts will either specifically allow or disallow them. I have never seen a lease that stipulated that guests are p

          • You can invite over, but that is not sub-leasing though. Sub-leasing means you are leaving the apartment temporarily but you don't want to lose your tenancy, so you sub-lease to someone else who will pay the rent. That person should meet the same standards you did when you applied for the rental. This does not seem to be what a weekend vacation rental is, you may be gone for 2 days but your rent is monthly and not daily.

            I have seen landlords raise rent when the figure out that there are now two people ef

      • The right to sublet is often standard in rental agreements

        It's right there in the summary that the leases in question cannot be sublet: "a form of illegal subletting"

      • The right to sublet is often standard in rental agreements.

        The owners are already getting a cut. It's called rent.

        Standard??? since when? The standard is generally NO RIGHT to sublet.

      • Where do you live? - I have never seen a lease that does not forbid subletting. I doubt any of this is about the owners "getting a cut", as an Aussie landlord I would be especially concerned about the effect of subletting on my insurance policy. If the place is trashed will I don't want to be personally chasing some penniless college students with the bill. Accidents and drunken parties happen every second of the day, I want my insurance company to organise and pay for any repairs with the minimum amount of
        • Surely there is just some extra amount you can pay the insurance company to cover damage in the event of subletting. Just pass that cost onto your lessee if they want to sub-lease.
    • It's property that you've entered into a contract to acquire the right to occupy and use in exchange money. What seems reasonable is simply having the contract spell out what is and is not allowed so both parties can make an informed decision about whether they want to agree to the contract.

    • I tend to disagree. The landlord made a "convenient" long term lease contract with the renter who, in turn, has the work with finding short term renters and bears the risk that he won't find any, thus having to pay rent while gaining no income.

      It is, essentially, like the situation between wholesale and retail. And I guess you don't want to tell us that the wholesale has any right to any additional compensation above the wholesale price whenever the retailer sells part of the commodity he bought in bulk?

      • The difference between your examples is that you are talking renting vs sale. The ownership of the property remains with the original owner. There are differences in wear and tear between long term renters and short stays and yet in this instance the cost of those repairs and maintenance increases is staying with the original owner and not being put onto the middle man.

        • Actually, it is. When you're renting, any wear that goes above and beyond normal use is something you have to compensate the landlord for.

          • My experience with renters has been that this only goes as far as their bond. After that the owner has to go through the legal process to recoup and is often not worth the recovery cost.

      • Localities that allow sub-leasing usually require some agreement between the owner and the renter. The purpose of the sub-lease is that the tenant will vacate temporarily but will return and does not want to lose the right to rent (especially in the case of rent control). This does not cover the AirBnB case of leaving for the weekend and hoping to make some fast cash in secret. The renter must inform the owner or landlord or manager and they must give consent first. Sometimes there is a reasonable conse

      • Re: (Score:2)

        by klui ( 457783 )

        If the renter wants to make money with property, they should buy a house. Or they rent from people who explicitly permit subleasing. The contracts I've seen are quite clear: either tenants can sublease or they cannot. Most, if not all of them I've seen do not allow it. People who have thought it through tend not to allow it.

        • Laws which permit X but not if it is in exchange for money are always a bit hard to manage. It's not always easy to prove a quid pro quo arrangement. Obviously in the case of airbnb it's pretty clear, but what about couch surfing? What about letting people you don't know stay at your place you are renting when you are on vacation? What if you let people stay in your apartment in exchange for food or use of a car?

    • Re: (Score:2)

      by gl4ss ( 559668 )

      but it is, effectively.

      while you are renting, it is in your command.

      or put in other ways, if the damage from the sub-renter is your responsibility then the owner should have no cut or no say in anything.

      aaaaanyways, in some countries/legislations this is exactly the case. you rent your property and you have NO right to make spot checks or creep around and make up petty rules.

  • They should put clauses in their leases banning subletting/AirBnB. Do that and then anyone who violates it can be evicted for breaching the lease.

  • Analogy, please (Score:5, Funny)

    by Sloppy ( 14984 ) on Thursday December 17, 2015 @06:06PM (#51140339) Homepage Journal

    This is Slashdot, so we need analogies.

    Say I have a KVM Linode, and then "WebBnB" wants an LXC container on my Linode, and they're running Apache in their container, and serving up several VirtualHost websites for their customers. WebBnB needs to charge their customers for the websites, so I can charge them, and Linode can charge me extra. And we all take a cut, thereby making WebBnB the stupidest and most expensive webhosting company ever, so the customers leave 'em and start doing business directly with Linode. Problem solved.

  • I am a Landlord (Score:5, Informative)

    by brian.stinar ( 1104135 ) on Thursday December 17, 2015 @06:23PM (#51140447) Homepage

    I am a landlord, of four one-bedroom apartments, and all of my leases explicitly disallow subletting. Numerous posters, with zero stated understanding of any kind of real estate practice, seem to think that subletting is "illegal" if it's disallowed in their lease. Someone is not going to go to jail, or have to deal with the cops, for breaking a provision in a lease I wrote. They may get evicted, which could involve the cops, but that's an eviction. Breaking the agreement isn't going to have legal consequences, past the *potential* eviction, unless I chose to try and have a judge pass a judgement (and then good luck on enforcing this judgement.)

    Plus, this 100% depends on the lease. I can write a lease which gives full authority to sublet, one that disallows subletting, or one that gives me a percentage of the sublet. Unless we read the lease, there is no reason to try and pass any kind of informed judgement on the situation.

    The entire process I described to you, having a judge pass judgement against someone, and then sending that person to collections (or garnishing their wages) is a big, big, pain. Plus, it's going to destroy the relationship with the renter. The judge is going to award you probably all the income they made, since they were not authorized to resell your place, and maybe 3x as much for damages. That's still not worth your time, unless you like spending time in court or need to be there anyways. Even then, the tenant isn't going to be able to pay, and collections won't be able to get it out of them...

    It's like 1000x easier if you have an agreement in place with airbnb.com, as a property owner, to automatically get a cut of the short term rental on your place. Especially if you own a gigantic tower in New York City, as opposed to four rinky dinky apartments in Albuquerque, New Mexico (like I do.) You can negotiate with airbnb.com ONCE for your entire property (if you have a standard subletting clause, which everyone is under) as opposed to getting a judge to offer a judgement against every single person, who is going to end their lease at that point.

    The only reason this is even news is because most people have no idea about how rental property actually works. This isn't news - it's called good business.

    • Re: (Score:2)

      by k6mfw ( 1182893 )

      Numerous posters, with zero stated understanding of any kind of real estate practice, seem to think that subletting is "illegal" if it's disallowed in their lease. Someone is not going to go to jail, or have to deal with the cops,

      Yeah but maybe they like to imagine numerous police in battle gear busting down doors with tear gas and flashbang grenades, all makes action footage for the evening news. In the real world, lease disagreements and mitigations are PITA and to outside observer it's really boring (unless it's elevated to The Judge Judy Show). I have no idea what this airbnd site is about, I guess I need to research it so I can make sensible arguments on the forums.

      • "...imagine numerous police in battle gear busting down doors with tear gas and flashbang grenades, all makes action footage for the evening news."

        That make me laugh.

  • I'm not getting into the whole subletting thing, as I know it's a hairy mess in some places, but I don't think a weekend stay or other short time really qualifies for what I'd call a sublet.
    On the other hand, violating your lease, is definitely a problem, even if you feel it's unfair.

    Now as to the landlords/property owners wanting a cut, that's pretty bogus and greedy.
    Though I would find having the renter pay obtain an appropriate insurance before hand to cover things if the AirBnB 'visitor' messed somethin

  • The sharing/gig economic model assumes that someone owns something of economic value that is not already 100% utilized, be it an automobile, a domicile, labor, or what-have-you. If you want to sell use of something you don't own, you either need to stay under the radar of the owner, or have an agreement giving you the right to make the sale.

    A comment snarks about whether adding a baby counts as sharing. In the US, usually no, unless you live in a community whose covenant limits permanent residents to 55-and

  • This whole article can be boiled down to "We want a piece of the action".

  • In related news...

    CompStak wants a share of PlayStation revenues.

    CompStak is the CRE (Commercial Real Estate) company that leases the 2207 Bridgepointe Pkwy, San Mateo, CA building to Sony Entertainment for the production of software for the Sony PlayStation, including their FreeBSD based operating systems development.

    They are upset that their renters are making money through their least of their property, and have decided they want a cut of the revenues that result from the business done by their lessees.

    J

    • Re: (Score:2)

      by cmholm ( 69081 )

      That's an interesting thought, and it wouldn't surprise me if a landlord eventually tries to pull that act on commercial property via an inventive reading of the lease.

      However, I'm reasonably sure Sony's lease allows them to pursue normal s/w business activities... unless they sublet to Sony Pictures for a pr0n shoot.

      • That's an interesting thought, and it wouldn't surprise me if a landlord eventually tries to pull that act on commercial property via an inventive reading of the lease.

        This is pretty much how McDonalds franchising works: they pick the location for you, they buy the real estate, and then they lease it to you on the condition that you pay them franchise fees, rent, and so on on top of that.

        It's also how most "incubators" and "accelerators" operate: they give you a location to work in exchange for an equity cut. The only real difference to the Sony scenario is that Sony wouldn't give them that cut, because Sony isn't a cash-strapped startup.

        Most people renting housing are a

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