Court tosses suit, sides with renters, Airbnb
The ruling is a win for tenants who use the site without their landlord’s permission
In a win for some renters who rely on Airbnb to make extra cash, a federal judge has tossed a lawsuit that sought to crack down on hosts using the short-term rental site without their landlords’ permission.
Aimco, a massive landlord that owns apartment buildings in the Bay Area and throughout the U.S., had tried to force San Francisco-based Airbnb to police tenants who list their apartments on the site in violation of their leases. But a federal judge in Los Angeles sided with Airbnb on Friday, a welcomed victory as the startup continues ramping up efforts to appeal to the Bay Area’s growing population of renters.
“We are pleased with the court’s decision that ensures Airbnb can continue to support tenant hosts who use our platform to help pay the bills,” Airbnb spokesman Nick Papas wrote in an emailed statement. “The partnerships we have established with landlords have made it clear that home sharing can be a win-win situation for everyone.”
Aimco disagrees with the court’s ruling, spokeswoman Cindy Lempke said Tuesday,
and the company is weighing its legal options.
“Airbnb is not a passive online platform, but an active and knowing participant in the illegal shortterm rentals of our apartments,” Lempke wrote in an emailed statement. “Aimco has made the deliberate choice to expressly prohibit short-term rentals to unaccountable Airbnb users who have not undergone our background screening, who cause disruption for our residents, and who are apt to treat our apartments like hotel rooms rather than homes. We will continue to do all we can to stand up for our residents, advocate for our private property rights, and address the upheaval caused by Airbnb.”
Denver-based Aimco, which owns apartments in San Jose, San Mateo, Redwood City and San Bruno, sued Airbnb last year, arguing Airbnb guests were wreaking havoc in some of its Los Angeles properties. Tenants complained about loud partying and disrespectful behavior by Airbnb guests, who also damaged the property and sparked safety concerns, according to Aimco. The landlord says it had to increase security patrols as a result of the influx of unauthorized guests.
Aimco leases prohibit
subletting its apartments, but the landlord estimates hundreds of tenants use Airbnb to do so anyway.
The landlord asked Airbnb to kick Aimco tenants off its platform, and Airbnb refused, setting the stage for a legal showdown. Aimco sought to bring a class action lawsuit on behalf of all landlords who own apartment buildings where Airbnb facilitates short-term rentals without handing over a portion of the profits to the landlord.
But on Friday, U.S. District Judge Dolly Gee ruled the startup was in the right. She found Airbnb is protected under the Communications Decency Act, a law that shields internet platforms from liability for the content third-parties post on their websites. That means Airbnb is not responsible for the actions of tenants who choose to use Airbnb to violate their leases.
“Airbnb hosts — not Airbnb — are responsible for providing the actual listing information,” Gee wrote, granting Airbnb’s motion to dismiss the suit. “Airbnb ‘merely provide a framework that could be utilized for proper or improper purposes.’ ”
A similar lawsuit Aimco filed against Airbnb is moving forward in state court in Florida, where Lempke says the court recently rejected Airbnb’s attempt to throw out the case.
For years Airbnb has
been plagued with controversy over whether it’s liable for nefarious conduct facilitated by its platform, and what, if anything, the startup should do to police those bad actors. San Francisco and a handful of other cities attempted to force Airbnb to reject bookings that violated the cities’ short-term rental rules. Airbnb refused and sued San Francisco, but after the judge sided with the city in an early ruling, Airbnb settled the case last year, and agreed to do more to help the city enforce its rules.
San Francisco also tries to prevent tenants from renting their apartments on Airbnb in violation of their leases. Airbnb hosts are required to register with the city, and when they do, the city sends their landlord a notice. San Jose has no such registry, but the Airbnb website warns hosts to obtain their landlord’s permission before renting their home. Oakland is still crafting regulations for Airbnb and other short-term rental platforms.
The court’s decision in the Aimco case is particularly good news for Airbnb as the startup eyes renters as a potentially lucrative income source. In 2016, Airbnb launched its “Friendly Buildings” initiative, which gives tenants the green-light to rent their apartments on Airbnb, as long as they share the proceeds with their landlords. Airbnb also is working with a developer to build the firstever Airbnb-branded apartment in Florida — a building that will specifically cater to renters who want to sublet their rooms on Airbnb.
Airbnb’s new renter focus may be a prudent business move as the Bay Area’s housing landscape continues to change. The startup has long bragged that it helps homeowners afford their houses by making extra cash, but as more people rent in the Bay Area and fewer buy homes, Airbnb is taking note. The share of Bay Area households renting increased by about 5 percent over the past decade, while the share that own their home has dropped in kind, according to New York University’s Furman Center for Real Estate and Urban Policy.
Despite ongoing skirmishes between Airbnb and landlords, the company says more building owners are coming around. So far Airbnb has 13,000 units in its Friendly Buildings program.
“We are excited to have many such partnerships in place,” Papas wrote Tuesday, “and we continue to see tremendous interest from forward-looking landlords and developers who understand that home sharing is going to be part of the solution, especially for Millennials who are facing historic debt.”