What Are The Risks With Airbnb If You Rent Your Florida Home or Condo?

Posted By on November 3, 2015

Last Update: 03/21/16

The holiday season is here, and there are people all over the world who plan of spending their vacation basking in the warm Florida sunshine. Unfortunately, hotels and resorts throughout South Florida are already booked.  However, there’s still lodging opportunities for travelers who wish to visit Miami and Fort Lauderdale and our beautiful Florida beaches using Airbnb and similar online “sharing” rental services.

 

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What is Airbnb?

Airbnb is one of several online listing rental services that connects owners with renters who are interested in renting out a guest bedroom or the whole house or condo for a few days or weeks. These are short term rentals set up via the online site, directly between condo owner and prospective tenant.

From Airbnb’s site, you are told that renters can “discover amazing places” by finding “hosts with extra rooms, entire homes, and unique accommodations like castles and igloos.” Meanwhile, owners can rely on “Airbnb’s trusted services” to connect, confirm travel dates, and coordinate payment.”

Hosts on Airbnb set the rent. Hosts upload and keep track of their online rental calendar. Key here: hosts don’t have to pay to place the rental on Airbnb. When the host shows their rental as available to let, Airbnb includes their space in its search results.

What Are Some Issues for Florida Home and Condo Owners Who Want to Rent Their Places?

For those who own condos, townhouses, or single family homes here in South Florida, there are lots of benefits to short term renting services like Airbnb. It’s a great way to make some extra cash.

But there are important issues to consider before using one of these online rental services as a real estate owner in Florida. Things like:

1. Who Must Pay Taxes?

For one thing, there is the question of taxes (bed tax, sales tax, etc.). Short term rentals by home owners puts them in the business of providing lodging, just like Hyatt or Hilton. Which means that the taxing authorities may well expect to be paid lodging related taxes.

Airbnb provides an on-site list of jurisdictions that impose these taxes, and Airbnb also collects and remits the taxes on behalf of its hosts.  Florida (and some of its municipalities) expect to be paid these lodging taxes, and no – they aren’t the same as income tax. (Hosts may have to pay federal income taxes on their rental revenues in addition to the lodging tax (which may be deductible). Check with your tax advisor.)

2. Do Condo Boards Like It?

For condo owners, renting out your beautiful South Florida condo on Airbnb may sound like a great idea to make some money. However, your neighbors may not like the idea of strangers traipsing through the condo complex using the common elements; the Condo Association may have something to say about it, too.

Whether or not you are allowed to sublet your condo in short term online rentals is covered by the condo rules and regulations. There are Florida condos where you can’t do any kind of “house swap” even if you don’t get paid, much less where you rent out the place.

Condo owners who jump onto Airbnb and start renting out their Florida condo may be surprised to find themselves subject to fines and other negative ramifications from their association.

3. Who Bears The Risk of Injury Claims?

Consider the recent news story out of Rhode Island. This past July, a young American student traveled to Spain and, being on a budget, decided to take advantage of an Airbnb rental in Madrid. Once he got there, he was held in the apartment against his will and sexually assaulted.

While he was able to contact his mother by phone, she had a horrific time trying to get him help with the local police — if fact, they didn’t make it to the Airbnb rental in time to prevent the rape.

Not only did Airbnb not take on liability for the injury in the Airbnb rental, that was an issue to be addressed between host and renter, but Airbnb also didn’t take on any responsibility for trying to get help.  That’s why the mother in America was trying to call Spanish police.

For the Florida home owner, this story is important.  Florida hosts on Airbnb (or other sharing sites) need to understand the risk of someone being hurt or killed while renting their place.  It needs to be evaluated carefully. Airbnb is offering a free $1,000,000 liability insurance policy to cover its U.S. hosts under its “Host Protection Insurance Program.”

However, this is insurance coverage that will take effect only after the home owner’s primary coverage has been used. It is “secondary” coverage.

A big concern for Florida home owners: the host’s homeowner’s policy needs to be checked, too. Many homeowner’s insurance policies will not cover commercial uses of the home, and these short-term rentals can be considered lodging for profit.

A good piece of advice if you have a question about Airbnb is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.

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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.

 
 
 
 
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Comments

3 Responses to “What Are The Risks With Airbnb If You Rent Your Florida Home or Condo?”

  1. Eric English says:

    Hi. I am going to start renting on AirBnB and would love to know what laws apply and if I have to register anything. Thank you for your time!

  2. Katia Bordy says:

    Wanting to do AirBnB in Hallandale FL private family home I own. I am looking for information.

  3. Sorry if this is frustrating! However, we’re not allowed to answer personal queries in blog post comments, so we ask that you give our office a call (see the toll free number above?) for a chat about your situation.
    Thanks,
    Larry

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