The latest Airbnb legal disputes: regulating the booming home-sharing industry

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Airbnb has rarely been out of the news in recent years. As a startup, its had major success revolutionising the home-sharing industry with short-term rents, transforming tourism and travelling at the same time.

But it’s also no stranger to the courtroom. Airbnb has already had more than its fair share of legal disputes, some of which its lost – in 2013 the company was fined 30,000 euros in Barcelona – and many of which are still ongoing.

The legal precedent set by these battles should pique any property law specialists and landlords’ interest, as they could shape the future of Airbnb and short-term lettings around the world.

Airbnb as a home-sharing platform

In 2008, Airbnb was launched as a platform geared towards letting young creatives supplement their income by renting out spare rooms. What it also created was a new socially engaged way of travelling.

Its basic premise is an online marketplace which publishes third-party ads for landlords. It’s a property business model already well tested by companies like Shop Property, who operate successful online hubs with commercial property for rent or sale.

As an online platform, Airbnb is perfectly legal. The trouble comes from the fact that some rentals found onsite fall short of local housing laws and regulations regarding areas such as tourist taxes and rental period lengths.

The changing nature of Airbnb listings 

The founding premise of Airbnb was sound, but today industry leaders are arguing that its nature has altered considerably as the business has grown. With over two million worldwide listings, there are debates over who really profits from the site.

The Guardian has reported that growing offerings from third party management companies are letting Airbnb become slowly dominated by commercial landlords. For example, 36 per cent of Airbnb listings for London come from a host with multiple homes on the site.

Airbnb’s main critics say that it’s questionable letting practises are escalating the housing crisis, and they also question the company’s responsibility in regards to illegal abuses of the site by commercial landlords. The truth is still unclear, but it’s certainly becoming harder to regulate the home-sharing industry.

Legal disputes against Airbnb

San Francisco is one of many cities attempting to fight Airbnb. They implemented regulations that required landlords who list on the site to register with the city, and they also wanted Airbnb and similar companies to help enforce them.

But Airbnb is fighting against these new ordinances, arguing that their First Amendment right to commercial speech is being violated. Knowing which side the law will ultimately support is increasingly difficult to call as the dispute develops.

As Marisa Kendal writes in the Mercury News, the battle will come down to whether the judge views Airbnb ‘as an online marketplace that merely publishes third-party ads written by landlords – which would be a win for Airbnb – or a retailer that rents properties to travellers’.

Whatever the result, the effects for Airbnb’s future operations and the home-sharing industry in general will be massive. It’ll be a landmark event with the potential to drastically alter rental property law and regulations, and property law specialists should keep a keen eye on developments.