Liz Gannes

Recent Posts by Liz Gannes

This Could Be a Problem: NYC Fines Airbnb’s Seemingly Least-Offending Host

What’s interesting and potentially quite damaging about a New York City ruling this week against an Airbnb host is that it shows that the law may disapprove of one of the most innocuous kinds of peer-to-peer home-sharing: Renting out your bedroom to make a little extra money when you’re traveling.

airbnb_featureWhile some kinds of Airbnb stays are much more controversial — for instance, someone who rents an apartment but doesn’t live there and posts the entire thing on Airbnb for rentals, without the landlord’s knowledge or approval – the host in question, Nigel Warren, was pretty much exemplary by Airbnb’s standards.

According to Warren’s testimony, he rented out his bedroom while he was out of town, he had only hosted on Airbnb three times, and his roommate continued to occupy the apartment while the guests visited (though the judge said he would have been happier if the roommate and the guests interacted, and if the guests visited the roommate’s bedroom as well, which seems like an odd quibble).

The ruling applies to the part of Airbnb’s business that the company saw as entirely unimpeachable. And even if the company can get it reversed, it will surely have a chilling effect on potential hosts who don’t want to be taken to court and fined.

As part of a larger statement indicating that it will likely try to help an appeal, Airbnb said, “[T]his decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes … 87 percent of Airbnb hosts in New York list just a home they live in — they are average New Yorkers trying to make ends meet, not illegal hotels.”

However, Airbnb is not a party in the case, and it was not assisting with or paying for Warren’s legal defense, so it’s unclear what the company’s standing is. The company is arguing that a 2010 New York law that limits illegal hotels should not apply to “regular people.”

Warren (well, actually his landlord, but Warren took responsibility) has been ordered to pay $2,400 in fines, and the case and context are well described in this CNET article. It appears that the main reason Warren was singled out was because after a complaint was filed, an inspector ran into his guests in the hallway.

Warren told CNET, “I like what Airbnb does, and I don’t want this ruling to stand in the way of what I think is, overall, a great startup.”

Meanwhile, Airbnb does not expect to change its practices as a result of the ruling, as its hosts are responsible for complying with local laws. In the past month, the company added an additional pop-up message during its host sign-up process that helps educate them about what exactly those laws are.

The pop-up memo doesn’t give any sort of explicit region-by-region legal advice, but it says in part:

“Some cities have laws that restrict your ability to host paying guests for short periods. … Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement. These rules can be confusing.”

Airbnbpopup

Here’s the NYC ruling:

Decision and Order for NOV 35006622J


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik