Major Property Manager Sues Airbnb for Interfering With Leases

by | Jul 31, 2017 | Tenant Screening

One of the country’s largest apartment managers, Aimco, is stepping up the pressure on vacation rental service Airbnb. Aimco announced that it recently beefed up its previously filed claims against Airbnb by asking for an injunction against the service, restitution for unfair competition, and the inclusion of all affected apartment owners.

Aimco, which owns 188 communities in 22 states and the District of Columbia, says that prior to filing the lawsuit, it had asked Airbnb to stop allowing unauthorized rentals in its buildings, but that Airbnb failed to follow its own policy of prohibiting listings that breach a tenant’s lease.

Lawsuits are currently pending in California and in Florida. The complaints allege that Airbnb’s revenues depend largely upon unauthorized rentals where tenants clandestinely profit while landlords foot the bill and suffer the risks. It alleges that Airbnb’s involvement in the process is an abuse of landlords’ rights, interferes with contracts, and encourages trespassers onto rental properties.

In a statement released by the company, Aimco CEO Terry Considine explains, “Airbnb continues its unlawful practice of knowingly promoting the breaking of lease agreements between residents and property owners and profiting from illegal rentals of properties it does not own. There are countless examples of transient Airbnb guests causing disruption, using fraudulent passes to access resident amenities, and showing no regard for the safe, peaceful environment we strive to create for our permanent residents. Aimco is proud to take the lead in filing a class action complaint, standing up for our residents and for the thousands of property owners who have experienced upheaval due to Airbnb’s actions.”

Like most landlords, Aimco requires applicants to undergo criminal background checks and credit checks before leasing. In addition, Aimco tenants are educated on how to be good neighbors. Airbnb guests, on the other hand, are not vetted in this way. Many of these visitors are from out of town or international travelers, and seeking only nightly or short-term vacation rentals, leaving little incentive for these guests to behave. The company says it has had numerous problems with Airbnb guests, including disorderly conduct requiring police intervention.

Aimco says it was Airbnb’s continued refusal to enforce its own policy regarding unauthorized rental listings that motivated the company to step up its legal battle.

To counter complaints from landlords regarding unauthorized tenant sublets, Airbnb has created the Friendly Buildings Program, which allows tenants to enlist support from the landlord who consent to the sublets. According to Airbnb, about 10,000 apartment units are currently enrolled. Participating landlords are required to modify their lease agreements to allow for short-term rental. However, one significant difficulty with the program is the anonymity of guests. According to Airbnb, regardless of whether the landlord participates in that program, personal information about guests will not be shared.

The start-up Pillow Residential is now providing technology-based support — like easier listings and automated lockboxes — to tenants using Airbnb. Pillow is marketing to building owners willing to consider Airbnb sublets in return for a portion of the tenants’ profits. Pillow also hopes to attract landlords who want to rent out vacancies on a short-term basis through Airbnb while searching for a long-term tenant.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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