With many short-term subletting options available for renters looking at posting their apartments on sites like Airbnb, couch surfer, vrbo, HomeAway, and others, it has now become easy for anyone to make that extra buck off that empty room (or couch) in a short period.  A recent study reveals that the leader in short-term rental, Airbnb, is now active in 192 countries, 57,000 cities and 173,000 units are listed in the US alone. With such phenomenal numbers, what does that mean for a property management company?

Trimark Properties, a student housing property management firm based in Gainesville, Florida, is experiencing our first web-2.0 year, with students posting their apartments on the popular short-term rental websites. We offer apartments near UF and typically leases to University of Florida College students who enter into one-year lease terms, and we recently discovered a listing for one of our apartments on Airbnb, where the tenant had used photos and text from the Trimark Properties website.

Many of Trimark’s renters are only attending college for ten months, but their apartment lease contracts are twelve months long. The renter, therefore, has two months when they will not be living in the apartment but has to pay rent. Does that give them a free ticket to use sites such as Airbnb to collect additional rent from a stranger while they are away on vacation?

“Our lease agreement specifically prohibits our tenants from listing their apartments on short-term rental websites. Most of the people who rent apartments in Gainesville are students who do not have any experience in qualifying potential renters. Many of our renters are unaware of the liability that comes with listing an apartment on Airbnb. They simply do not realize the potential financial liability it would place on them and their consignors,” said Aubrey Morey, VP of Sales and Marketing at Trimark Properties.

Renting an apartment to students in a multifamily housing community can be complex. Property managers have to deal with students, parents, roommates, and consignors. When signing the lease for the apartment, the renters agree not to allow anyone to live in the apartment unless he or she have signed onto the lease agreement. Therefore, posting the apartment on Airbnb is a violation of the lease terms. At the point that they sign the lease, the students and the parents agree to abide by the lease terms, but when they decide to vacate the apartment, renters are often frustrated by the idea of paying for an apartment that they are not living in.

Picture the situation from the landlord’s perspective. The landlord does not personally know the original student renter when the student renter signs the lease and reserves the apartment, but the lease and application process allows the landlord to perform a background check, rental history checks, credit check and obtain a large security deposit for any potential damage. When a student then lists the apartment on Airbnb, the short-term Airbnb guest bypasses the application process entirely. Since the Airbnb guest does not sign onto the lease or apply for the apartment, there is no way for the landlord to perform any qualification checks and deny them occupancy. Imagine the scenario below:

·         A tenant is leaving for a week long spring break, but, in hopes of making extra income, the tenant lists the apartment on Airbnb.

·         The tenant has never met the guest. The tenant does not inform the property manager about their arrangement with Airbnb since it is a lease violation which could result in the tenant being evicted.

·         There is no easy way to find out if the unit is listed online as a short-term rental since these sites do not list properties by address and keep renter information anonymous until both parties agree and payment is made.

·         The “stranger” guest arrives and has full access to the renter’s unit, common areas (pool, laundry, recreation room, kitchen, study room, etc.) while the tenant is away.

What could go wrong? Maybe nothing. Maybe everything.

Prevention is better than cure

The easiest way to prevent such situations is to make the student renter aware of the lease agreement. In most lease agreements, anyone remaining in the unit for more than one night must sign onto the lease agreement and must be financially qualified and approved by management. Landlords should also consider adding a clause to their lease that states that guest may only be present in the apartment or house when a lease signor is present. Implementing such restrictions on the lease and making the renters aware of such restraints will prove beneficial for both parties in the future.

So they Airbnb the apartment, now what?

Imagine a scenario where a student renter proceeds and lists the unit on Airbnb but is very cautious and careful about finding the guest. He selects a highly rated tenant who has a 5-star rating from all the previous hosts. To an uninformed tenant, this may seem like a low-risk scenario, but it may actually be very high risk.

For example, if the Airbnb guest is reheating a pizza in the kitchen but accidentally puts the cardboard into the oven, there could be a small fire in the apartment. In this scenario, the Airbnb guest is not on the lease. The lease signor would be financially responsible for all damages to the apartment, plus damages to any other apartment that is affected by the fire. This certainly is not a situation that a property owner or a tenant wants to occur.

It is, therefore, important for the landlord to consider educating all renters about the risks of letting a stranger into their apartment. If the apartment complex has a newsletter, property managers should consider including information on the potential repercussions. The property managers can also start a vigil program among students so they can report on any strange guests or an abnormal flow of people going in and out of apartments.

3^rd Party Services Can Help

There are 3^rd party services that claim to do the job for the property managers and landlords. The site SubletAlert notifies the subscribers if their properties are listed on Airbnb.

Although Gainesville is not a major hub for short term or vacation rental services as compared to the huge metros like New York, London, and Paris,  this problem is emerging in all cities. Property managers across the country are reporting first-time Airbnb postings in their apartment complexes.

Property Managers Should Check Airbnb For Lease Violators

Morey also stated that during a recent check, a property manager found two renters who listed their apartments in Gainesville on the Airbnb site. Trimark Properties employees were able to contact the tenant through the Airbnb website, let them know that posting the apartment on the website was a lease violation, and explain the potential pitfalls to the renter. After the discussion, the tenant thanked the leasing agent for their help and agreed to take their bedroom off the Airbnb website.