Canada's Condominium Magazine
They say nothing can stop an idea whose time has come. Ideas come fast and furious in our wired world, and thanks to the sheer power of billions of connected consumers around the globe, ideas can sweep the planet in the click of a smartphone button. One idea currently blazing hot is Airbnb. It’s the San Francisco-based peer-to-peer room-booking company that started almost by accident and now rivals the big hotel chains in market value: Airbnb is reportedly worth $10 billion today. It operates in 34,000 cities around the world and claims to have more than 1 million listings. More than 25 million guests have booked rooms since 2008. The founders of Airbnb are listed as billionaires by Forbes magazine.
The appeal of staying in someone else’s home is simple: travelers who use Airbnb can find nice accommodations where they can live like a local, for less than they would pay at a hotel. A quick check of Toronto properties available on Airbnb shows a price range of $59–$109 per night. Renters save money. Meanwhile, the people who rent out their space can make money. Instead of leaving the condo or house empty while the owner goes away for a few weeks, he or she can rent it out, conceivably taking in more than the cost of the getaway. Or owners can rent out empty bedrooms on an ongoing basis, being there to keep an eye on things as strangers come and go through their homes. What’s not to love?
Of course there is opposition to Airbnb from some quarters. The hotel industry is understandably less than welcoming of the competition, which it says has an unfair advantage. The hospitality industry is highly regulated: Airbnb is not. Hotels and regulated bed and breakfasts pay taxes that, at the moment, Airbnb users do not. Some cities, including New York and Montreal, have enacted laws that forbid apartment renters and condo owners from renting out their homes for short periods. As of now, there are no such laws against the short-term rental of one’s home in Toronto.
Airbnb has generated its share of the usual horror stories. One California man rented out his home through Airbnb for a month, but when he returned, the renter refused to leave, forcing the owner to take costly legal action to have him evicted. Others have reported their property ransacked by guests (including axe marks in the doors), disputes over payments, apartments used for illegal activities (drugs, prostitution) and more. These types of behaviour, however, are also seen in the mainstream hotel business. A certain percentage of people out there will always break the law and be just plain crazy. Airbnb advises that owners do a bit of background checking on potential renters, such as checking for positive reviews by previous owners. Renters can do the same, finding out whether the place is as advertised.
Toronto condo owners who are interested in getting in on the Airbnb action should check first with their condo corporation. It may be against the corporation’s rules to rent your condo for a short term. That situation is in a state of flux, according to lawyer Jason Rivalt. He wrote in the Law Times that more and more condo corporations are including “explicit permissions” for short-term rentals, because of new businesses like Airbnb. The openness to short-term rentals also makes the condos more marketable, something developers want.
There is conflict here too, however. Lawyer Rivalt said that condo owners contact him “every week” with complaints about short-term renters having a negative effect on their buildings. Excessive wear and tear on common elements is one complaint he hears a lot; security concerns are another.
Anyone considering renting out a condo or any other space should take appropriate measures with their insurance to cover the added risk. Insurance companies do not like it when something occurs that is not covered in a policy. They will almost certainly deny any claim made as a result of a stranger’s actions in the policy-holder’s home. If a guest started a fire in a condo, for example, the owner would be liable. Airbnb does offer its own coverage (up to $900,000) for damage or missing items, but not personal liability.
So check with the condo corporation that short-term rentals are allowed, and make sure you have the right insurance coverage. It could be the beginning of some beautiful relationships.