Airbnb: the legal lowdown
It was not long ago when the traditional ‘B&B’ sign hanging outside every corner guest house was all you needed to book your overnight accommodations. However in today’s digital world, a global disrupter known as Airbnb has changed the way people think about lodging and it is currently the world’s largest accommodation provider yet it owns no real estate.
More than 60-million guests worldwide have logged onto Airbnb to book one of their 2,3-million listings in over 191 countries. Listings in South Africa alone have increased by over 250% in 2015 compared to the year before as 134,000 guests stayed with 7,500 active hosts.
As Airbnb expands its unique brand of hospitality throughout South Africa, many locals are considering getting on board, so to speak, and we have laid down some of the legal points that are good to know.
What is Airbnb?
Founded in 2008 in San Francisco, Airbnb provides private individuals with the opportunity to host travellers and tourists in their own private homes. The concept originated to accommodate people-on-the-go and to allow private individuals to ‘monetise’ their extra space.
You can choose whether to rent out your entire house or only portions thereof. The emphasis is on a short period of stay, but it is ultimately up to the host’s discretion.
Becoming a host is relatively easy and all you need to do is sign up. Airbnb’s website provides easy step-by-step instructions on how to do this.
Who are the parties to the contract?
The contract constitutes an agreement between the host and the guests. Airbnb is not a party to any agreements entered into between hosts and guests. Airbnb merely provides an online platform where hosts and guests can discover one another. The host is an independent, third-party contractor and is not an employee, agent, joint venture or partner of Airbnb. The duties of hosts and guests may vary and depend solely on the contract entered into between those parties.
How much of the accommodation fee goes to the host?
A host determines his or her own price per stay. Airbnb takes a 3% host service fee and the rest is yours. Guests pay Airbnb directly prior to their arrival at your place, after which Airbnb deducts their portion and pays the balance over to you, as host, within 24 hours of check in. You don’t have to deal with the payments directly.
What if my property is damaged?
In the event where damage to property is attributable to the guest’s fault, he or she will be fully liable to cover such damages. In the event that no fault can be attributed to a guest, Airbnb offers a Host Guarantee that covers accidental damage to your property. The Host Guarantee does not cover cash and securities, collectibles, rare artwork, jewellery, pets or personal liability. As such Airbnb recommends that hosts remove valuables when renting their place. Normal wear and tear is also excluded.
In addition to the above, a host can also request a security deposit from guests.
How are hosts protected against third party claims?
Airbnb offers Host Protection Insurance. It provides primary liability coverage for hosts and landlords for up to $1 million per occurrence against third party claims of property damage or bodily injury that occur in a listing during a stay. This coverage is however subject to a $1 million cap per listing location. Certain conditions, limitations and exclusions may apply.
This coverage also covers landlords and homeowners associations if claims are brought against them. It may even cover claims if a guest damages building property (normally in the form of claims filed by a landlord against a host). Landlords are, however, only covered and/or the host is also a party to the claim.
Coverage excludes liability arising from: 1) intentional acts – assault and battery, sexual abuse or molestation; 2) loss of earnings; 3) personal and advertising injury; 4) fungi or bacteria; 5) Chinese drywall; 6) communicable diseases; 7) acts of terrorism; 8) product liability; 9) pollution and 10) asbestos, lead or silica.
What are the parties’ duties?
The duties of each party will depend upon their contract. However, Airbnb has certain policies that need to be adhered to by all hosts. These include:
- A Non-discrimination Policy: hosts may not discriminate based on race, colour, ethnicity, national origin, religion, sexual orientation, gender identity or marital status, unless contrary to the laws applicable in that specific area.
- An Extenuating Circumstances Policy: hosts manage their own cancellation policies. At times, however, certain circumstances outside of a host or guest’s control can impact their ability to meet the terms of a reservation. Airbnb has discretion to determine whether extenuating circumstances exists. In this event Airbnb will override a host’s cancellation policy and make refund decisions.
- A Guest Refund Policy: If your host cancelled your reservation, you can transfer your payment to a new Airbnb reservation or request a refund.
- A Content Policy: Airbnb reserves the right to remove content, in whole or part, that violates their guidelines and Terms of Service. In the event of repeated violations, Airbnb may suspend the account in question.
- Extortion Policy: Reviews are not allowed to be used to force a user to do something they are not obliged to do. If any form of extortion is detected, Airbnb may suspend or terminate the account in question.
How to share your experience?
Airbnb provides the opportunity for both hosts and guests to write reviews, be it positive or negative, about each other. These reviews will be visible to the public and will contain valuable information relating to prospective hosts and/or guests.
As Airbnb has grown from appealing to thrifty tourists to attracting business professionals, it is clear that the online marketplace is here to stay. Every month sees more locals climbing on to the platform as hosts to help make ends meet and simultaneously, droves of tourists are utilising the platform to explore our country.
Although there will always be some risks associated with using a share economy system such as Airbnb, all users can take measures to mitigate any problems. If you need more information or legal advice on the subject, please contact Abrahams & Gross Attorneys for assistance.
Henno Bothma and Shano Macris, Abrahams & Gross
t. 021 422 1323 | e. email@example.com