Issues Created by Online Short-Term Rental Companies
Want to quickly gain insights on short-term rental platforms? In case you missed it, Kayleigh B. Long from Hirzel Law PLC and John D. Gwyn of Cummings McClorey Davis & Acho shared some key considerations while filming in our studio. Here’s some helpful information from just one segment in your “Short-Term Rentals” on-demand seminar.
These excerpts have been edited for length and clarity.
ICLE: What issues do platforms like Airbnb and Vrbo present?
Kayleigh: One of the biggest issues that these platforms present, especially in subdivision and condominium communities, is that there really is no way to address the issues that pop up.
These online platforms recognize that many times the short-term renters who come into the communities present noise issues, traffic issues. Sometimes these communities are not supposed to allow short-term rentals at all. And the communities are trying to let the platforms know that there shouldn't be any listings on those websites at all. So the platforms have tried to provide a way for neighbors and associations to report either improper listings or rowdy short-term renters or any other issues that are coming up with the short-term rentals in their communities.
But many times, these communities and neighbors have found that while you can report the issues, nothing in reality actually happens. The listing stays up. The renters continue to come, there seems to be no penalties or consequences for the people who are listing. And instead, the neighbors in the community associations are left to try to enforce their own rules and regulations, which we see ends up being practically impossible because with the nature of short-term rentals, by the time you are able to actually enforce your remedy, the short-term renters are gone and a new set of short-term renters have entered. And then at the end of the day, the only remedy that many times you're left with is to report the short-term renters to the local police. And that just ends up using the local resources of the community and can be very frustrating for the neighbors and the community association alike.
ICLE: These sites are relatively new. What type of issues arise because of preexisting laws?
Kayleigh: One of the biggest conflicts that we see comes up with condominium associations.
The Michigan Condominium Act was initially passed in 1978, and the act directly addresses the process that co-owners are supposed to follow when they want to lease or rent their unit. And 10 days before they want to lease or rent their unit, they're supposed to notify their association that and provide their association with what the lease or rental agreement will look like before they even enter into the transaction with their renter or tenant. And then after that has been presented to the association, they are supposed to provide a signed copy of the agreement.
As you can imagine, based off of these platforms, the ability to book these rentals immediately removes any prior notification options to the association. There are no rental or lease agreements being provided to the associations, either beforehand or after the fact. And so many times the condominium associations have no idea who's coming in and out of the property at any given time. So, the timing mechanism of the Michigan Condominium Act definitely did not contemplate the immediacy of a lease or rental transaction that the online platforms now are able to generate.
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