Published on August 10, 2020
Forty-nine year-old Emma Kaufmann was looking forward to spending three weeks in Germany in June and July. But when her flight was canceled in early May, and American citizens were still blocked from flying into much of Europe, she decided to cancel the trip altogether, thinking she’d qualify for a refund on the $1,400 she had paid for accommodations through Airbnb.
Unfortunately, because Airbnb has continuously updated its policies throughout the coronavirus pandemic, Kaufmann learned that she didn’t qualify for a refund because she canceled before an update to the policy that would have included her reservation.
“How was I meant to predict what Airbnb’s policy would be on June 15? It is just as likely that they would not have extended their policy,” Kaufmann told USA Today.
She’s far from alone.
As an outbreak of a mysterious disease in China grew into a fast-spreading global pandemic in the first half of 2020, travelers were left with a lot of questions: Is it safe to continue traveling? What if I have to cancel a trip? Will I be able to get my money back?
As lockdown orders and travel bans were put in place, travel and tourism industry companies created fast-changing policies around who was eligible for refunds, credits, and more. It’s estimated that Airbnb alone lost more than $1 billion in canceled bookings — and has made many of its customers fight for refunds they’re entitled to.
But while news headlines have centered around jilted travelers fighting for refunds, there are other victims to Airbnb’s constantly-changing policies: Its hosts.
Hosts who depend on rental income have been left in the lurch by this, and many other nightmare scenarios, when protections they thought Airbnb afforded them were nowhere to be found. That’s why it’s vital for Airbnb hosts to know their rights — both those provided by Airbnb, and those provided by the law.
Hopefully, you aren’t reading this because you’ve already found yourself in a situation where you believe your host rights have been violated. Regardless, the best way for hosts to protect themselves is to know how. Here’s what you need to know.
In its hosting FAQ, Airbnb doesn’t say much about what it requires of hosts. It does put forth a set of basic requirements hosts must meet for each of their listings.
More explicit rules about what’s required to be an Airbnb host are buried in the platforms Terms of Service. Those state that hosts must:
There are also rules against harassment, discrimination, and using the Airbnb platform for anything other than posting your own listings that you intend to rent to guests.
Depending on your location, you may take on certain legal risks as an Airbnb host. These will vary from location to location, so be sure to do your research to find out what liabilities you may encounter in your home jurisdiction.
It’s up to hosts to know the laws where they’re based. As Airbnb has grown in popularity, many municipalities have created laws and regulations about when, where, and how hosts can operate short-term rentals. There may be zoning laws to consider, and some areas limit how many days per year a rental property can be sublet.
Airbnb offers some guidance and support around local laws, but notes in its terms of service that it’s ultimately up to hosts to ensure they’re operating within the confines of any local laws or rules.
In some cities, you may need to register your home as a short-term rental, or get a permit or license before you can legally rent on Airbnb. Cities like Boston and San Francisco have implemented registration processes for short-term rentals and home hotels, and those who operate without the proper paperwork can face steep fines.
Airbnb hosts are responsible for paying any applicable taxes on the income they earn from their listings. Airbnb has historically declined to hand over hosting data to tax authorities, allowing some unscrupulous hosts to skip out on their taxes. But that could change at any time, leaving those hosts on the hook for back taxes and penalties. It’s a much better plan to just pay the taxes you owe.
This is another potential liability that varies depending on each host’s situation.
If you rent your home, you’ll need to make sure there’s nothing in your lease agreement that forbids subletting.
If you own your home, you might think you’re in the clear. But if your home falls within the purview of an HOA or condo association, it’ll be up to you to ensure that you’re following their rules, if any, about renting and subletting.
Airbnb hosts aren’t currently being legally held to the same health and safety standards as hotels and other businesses in the service industry in most places. Still, though, if someone is injured on your property, you could find yourself at the other end of a liability lawsuit.
Some ways you can reduce your liability include:
No matter how many precautions a host takes, it’s impossible to plan for every potential liability. That’s why it’s important for hosts to invest in robust insurance that will cover themselves and their homes in the event of an emergency.
Now we’ve seen that it’s important for hosts to take a lot of steps to protect themselves when they offer a listing on Airbnb. But what about their rights? How will Airbnb protect them in the event that something goes wrong?
For the most part, Airbnb leaves this in the hands of the hosts themselves. The platform allows hosts to use their own discretion in a lot of ways to ensure they can protect themselves while using Airbnb. Here’s what some of those rules look like.
Whether to accept or deny a potential guest is always 100 percent up to the Airbnb host. Hosts don’t need to give any reason if they choose to deny a guest, which means they can use any potential guest’s profile and reviews to help vet them.
Hosts are also allowed to require that guests go through an identity verification process that requires them to submit personal information, social media links, or a government-issued ID to Airbnb to confirm their identity.
Airbnb allows hosts to create their own rules for their listings, and guests are required to know and abide by those rules during their stay. If a host catches a guest breaking any of the listed house rules, they can terminate their stay early and, in many cases, keep the money the guest paid.
Hosts can also set their own cancelation policies, so you can set yourself up to still make money if a guest cancels at the last minute.
However, during the coronavirus pandemic and any other disasters that fall under Airbnb’s “extenuating circumstances” policy, the rules around cancelations get a lot more murky than that. We’ve also learned from the pandemic that Airbnb can and will change its policies on the fly to protect itself — rather than help its hosts or customers.
One of the most confusing areas of host rights is when it comes to damage done to your home while a guest is staying there.
For small-scale damages, Airbnb writes in its terms of service that it can and will charge the payment method of a guest to cover costs if sufficient evidence is supplied by the host. In other words, if some dishes get broken, you can submit pictures of the damage to Airbnb, and they reserve the right to charge the guest for the cost of replacing them.
For larger damage claims, there’s Airbnb’s $1 Million Host Guarantee. But that’s far from a promise of protection for hosts, even if Airbnb presents it that way. Here’s what we mean.
In 2011, a host named EJ returned from a week-long business trip to the apartment she had listed on Airbnb while she was away — only to find that her home was unrecognizable. It had been ransacked and vandalized, and her personal property and information had been stolen by her guest. Over the next 24 hours, EJ tried every way she could think of to get in touch with Airbnb — the company’s listed phone number, a customer support email address, an “urgent” phone line for hosts — without getting any response.
EJ blogged about her nightmare experience, and when the story went viral, Airbnb responded to the backlash by creating a new promise for hosts: Its $1 Million Host Guarantee.
The idea is simple. If a guest causes damage to a host’s property or belongings, the host can contact that guest via Airbnb’s messaging platform to request payment for damages. If the guest refuses, the host can submit a claim for up to $1 million reimbursed by Airbnb.
But as we know from some high-profile news stories about trashed vacation rentals, getting Airbnb to honor its own guarantee isn’t nearly as simple as that slick landing page would have hosts believe.
According to the terms and services for the $1 Million Host Guarantee, Airbnb “agrees to pay you, as a Host, to repair or replace your Covered Property (as defined below) damaged or destroyed as a result of a Covered Loss… subject to the limitations, exclusions and conditions.”
What qualifies as a “Covered Loss?” And what are the “limitations, exclusions and conditions?” The terms and services document outlines pages and pages of exclusions. Certain types of property are excluded from coverage. Certain damages aren’t covered. Pet damage doesn’t qualify. Neither does damage caused by certain illegal activities that guests might partake in, like using illegal contraband (which could include drugs or weapons).
In a guide like this one, we’d like to summarize the terms and conditions for Airbnb’s $1 Million Host Guarantee, but in this case, when it comes to understanding how to protect yourself as a host, it’s too important — you need to read the entire thing. The fine print says that Airbnb can refuse to cover damage to your listing caused by guests in a massive range of scenarios, so that’s just what hosts need to be prepared for. It’s then up to them to weight the risks of proceeding with being an Airbnb host, getting outside insurance policies, or protecting themselves some other way in the case of serious damage done by an Airbnb guest.
Even if damage to a host’s listing is covered by Airbnb’s $1 Million Host Guarantee, the company can deny the claim and refuse to pay. What recourse do hosts have then?
In both Airbnb’s general terms of service, and the terms and conditions for the $1 Million Host Guarantee, there are clauses that say users of the Airbnb platform can’t sue Airbnb for damages or reimbursement. Instead, they’re required to use arbitration to settle any disputes.
These kinds of clauses are common in contracts with apps, web-based platforms, telecom companies, and more. The good news is that arbitration can be a good way for consumers to seek justice against big companies like Airbnb, and there are resources to help them do it.
FairShake wants to make arbitration a simpler, more accessible process for all consumers. Here’s how it works: You tell us about your complaint against Airbnb. We’ll help draft your legal demand, and then guide you through the paperwork and legal steps as you move toward either a settlement, or an arbitration hearing.
If you’ve had problems hosting on Airbnb and don’t know how to seek the justice you deserve, FairShake can help. Reach out today to see how we’re helping all kinds of people who have been jilted by Airbnb — and other companies — get the fair shakes they deserve.
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