Tenant Loses Rent-Controlled Apartment Due To Illegal AirBnB Use

by | Jan 15, 2016 | Firm News

Joelle Kraft had a rent-controlled apartment in Santa Monica which she posted on AirBnb and rented. Her landlord terminated the lease and sued to evict her on the grounds that the AirBnb rentals of the unit were illegal under Santa Monica law. The Santa Monica rent control ordinance specifically allows termination and eviction for any illegal activity. The residential zoning for the property makes any rental for less than 30 days illegal. Santa Monica does not have an AirBnb exception. The trial court granted the eviction, because the use was illegal.

Most cities do not have an AirBnB exception like San Francisco’s. Even San Francisco’s Short Term Rental provisions require registration, payment of a fee, a limit of only 90 days per year if the owner is not present during the rentals, and applies only to individuals. No companies. If a tenant in a rent-controlled unit were to fail to register and pay the required fees, the tenant’s AirBnB use, could be grounds for termination and eviction, even in San Francisco. However, that ordinance allows the tenant one chance to cure the breach within 30 days after notice.

This case could become a major test of the so-called “sharing economy.” The legal theory for allowing people to charge for driving people to their destination without a taxi license or medallion, and for allowing transient, short-term, hotel-like rentals in homes zoned residential only, is that the owner is “sharing” the car or residence and that the user is “contributing” to the expenses of owning the car or residence. Why can’t a prostitute claim the sex is free, and the payment is just a contribution to help with rent and expenses?

The published decision was an appeal from the limited jurisdiction court where the eviction trial was held, to the Appellate Division of the Superior Court. The landlord was represented by a sole practitioner, and the tenant represented herself, no lawyer. Appeals to the state Court of Appeal and Supreme Court are available, should the tenant choose to do so, maybe with help from AirBnB, Uber, and others. In the meantime, the officially published Superior Court Appellate Division decision is not technically binding on courts outside Los Angeles County, but it is persuasive. The decision also includes a detailed description of the evidence the landlord produced and the parts of that evidence which were crucial and won the case.

Tenants, including rent-control tenants, unless their city has an AirBnB law like San Francisco’s, “share” their home with others at their peril.