Thursday, September 7, 2017

Landlord Nightmare - Tenant Rents Out Home on AirBnB

Being a landlord isn't easy.   Being a remote landlord is even harder.

A recent article on CNBC gave me pause.   A landlord rented out his house to a nice couple who in turn rent it out on a weekly or even nightly basis on AirBnB.   Since it is illegal to rent out properties this way in Miami, he is fined hundreds of thousands of dollars by the city - more than the property is worth.

What's worse, these same tenants have been doing the same thing all over South Florida.   They rent out a house or condo claiming that they will live in it.  But instead, they list it on AirBnB, let the renters trash it out and pocket the proceeds until the landlord finally gets wise and throws them out.   Meanwhile, the landlord is fined by the city and could lose the property as a result.

Because of weepy landlord-tenant laws that posit that tenants are always victims it is nearly impossible to evict the tenants without spending months or years in court - and paying tens of thousands of dollars in attorney's fees.   For a remote landlord, living on the other side of the country, this is a particular nightmare.
Sadly, AirBnB, like most of these new "" websites (and I'm talking about you, Uber) skirt the law and hides behind ToS declarations.   They claim to have no responsibility for fraudulent listings and even make it hard for the real owner of a property to have a listing pulled.

They eventually pull the listing, but the damage is done - and the con artists who pulled this scam end up walking away with tens if not hundreds of thousands of dollars (and probably never paid a day's rent, either!).   And likely they are renting new properties under new names or even their existing ones, as there is no database of con artist tenants (although if you do a google search, their names will turn up today!).

Libertarians and Anarchists take note - this is what happens when you do a go-around on regulations.   In the past, we had taxi medallions and regulations because there were abuses in the taxi industry when it first started out.   Today, Uber is discovering the exact same problems that plagued the taxi industry in the 1920's - including too many cabs, which cut fares to the point where no one was making any money (Uber has yet to show a profit).

Similarly, while AirBnB and VRBO (which I have used as both landlord and renter in the past) are a go-around on traditional hotels and rental techniques.   Since they remove checks and balances from the system, they are rife for fraud like this.   And these online companies don't have the resources to check fraud, which is why they are loathe to do it - it subtracts from an already negative bottom line in many cases.