6 ms·

In some ways, this is the dark side of disrupting established industries: legal protections aren't in place yet; it's not clear what recourse people caught in n

by gerner 12y ago

In some ways, this is the dark side of disrupting established industries: legal protections aren't in place yet; it's not clear what recourse people caught in never before seen corner cases have. We (e.g. HN folks) are quick to applaud people with new ideas that are shaking things up (e.g. Airbnb, Uber, etc.) I suspect this is the sort of scenario detractors (e.g. Seattle City Council re: Uber) are worried about. Terrible situation, clearly. Still, important to see some of these scenarios actually play out. And it raises all the right questions: what should Airbnb do going forward? what should legal protections be going forward? should someone have seen this coming? and should they be held liable for it? (edit: typo)

_delirium 12y ago
I'm not sure these are "never before seen corner cases". This kind of stuff is pretty much Landlording 101, and it's standard practice for someone engaged in renting a property to know about eviction laws. This person wasn't even engaging in what you might call the new, casual-sharing-of-personal-possessions style of rental, where someone rents their own personal apartment out occasionally while they're on vacation. She was just doing the old-school landlord thing: she bought an investment property she did not live in, and was renting it full-time for profit. That is a line of business in which you can buy and read books, customized to your state, telling you exactly the basics you should know about!
- sanderjd 12y ago
  I think you're completely right, but it's worth noting that removing barriers to entry into existing businesses is a very viable business model. Even "buying and reading books customized to your state" is a barrier to entry that a company like AirBnB could help with (though they don't seem to want to go that direction).
- pstuart 12y ago
  But Airbnb, as a service, should at least filter/advise for knowingly stupid things like renting out for such an extended period.
  - chimeracoder 12y ago
    If they're going to that effort, then why can't they filter for knowingly illegal things, like short-term rentals in cities in which this practice is illegal? I don't see them doing either one anytime soon, since it presents a major PR/deniability problem.
    - pstuart 12y ago
      They're pretty much knowingly illegal as a business model, but that doesn't mean they can't protect their own users from simple abuses.
- URSpider94 12y ago
  This kind of stuff is pretty much Chauffeuring 101, and it's standard practice for someone engaged in driving for hire (through Lyft or UberX) to know about hack laws. This kind of stuff is pretty much Retailing 101, and it's standard practice for someone engaged in selling items on the open market (through eBay) to know about business laws. What's "disruptive" about all of these services is that they enable people who wouldn't ordinarily be willing to go through all the red tape and training to enter a previously specialized business, to do so with a few mouse clicks. One could argue that all of these services (AirBnB, Lyft, eBay) are targeted at amateurs who want to dabble, but we all know that they make a significant amount of revenue from people who are using their platforms to run full-scale businesses, in many cases without securing business licenses, liability insurance, paying relevant taxes and fees, etc. I don't know if I'd say that the services themselves are responsible, but they are certainly happy to take profit from high-volume vendors operating outside the law.
7Figures2Commas 12y ago
> In some ways, this is the dark side of disrupting established industries: legal protections aren't in place yet... That's simply not true. The homeowner voluntarily agreed to rent her home to someone for more than 30 days. On the 30th day, that person became a tenant and gained certain rights under the law. The homeowner still has legal rights of her own, but the nature of the rental she agreed to means that she will have to engage in a more involved process to evict the tenant. If the homeowner did not want to deal with this type of scenario, she had every right not to rent her home for 30+ days. In short, this has nothing to do with disruption or a lack of legal protections. Notwithstanding the fact that some AirBnB properties are being rented in violation of local laws and leases, AirBnB is simply a channel for marketing rental properties. The law already provides landlords and tenants with protections and obligations and every serious party engaged in the rental business is familiar with these laws. This story has everything to do with a homeowner engaging in a business she clearly knew nothing about.
- sanderjd 12y ago
  > every serious party engaged in the rental business is familiar with these laws AirBnB's disruption is to enable unserious parties to engage in the rental business, so the negative effects of unserious parties engaging in the rental business can pretty reasonably be laid at the feet of that disruption.
  - _delirium 12y ago
    For really casual renters I can see that: I think the "couchsurfing for money" type of AirBnB really is new, and brings in casual renters looking to rent out a couch or a spare room, or occasionally a spare apartment while they themselves are gone. But dabbling into full-time landlording, where you buy an apartment just to rent it out, is not really new or newly enabled by AirBnB. It's not like VRBO checks your sanity either; if you want to not pay attention to rental laws and get screwed on VRBO you could do that, too. Probably that has even happened, but nobody cares, because there's a cultural expectation that if you're renting an investment property on VRBO, you have an idea of what you're doing, and if not, that's your problem.
thrownaway2424 12y ago
You seem to be confused about what legal protections are or are not in place, and whom the law protects. This isn't some loophole or edge case in the law, this is an explicit protection for lessee which is written into the law for a specific reason. "Legitimate slumlords", if you can tolerate such a concept, are well aware of this provision, and will bodily remove you and your belongings from their flop houses on the 29th day. This is just an example of a person with barely enough capital to dabble in capitalism and lose. They thought they were going to flip a condo into rental income, skirted the law -- one wonders what other shortcuts were taken; did they have an occupant's insurance policy or a landlord's policy? did they take out a mortgage under the pretense of occupancy? Are they taking income tax interest deductions and claiming homeowner's property tax exemptions -- and pretty much got what they had coming.
- mattdeboard 12y ago
  "Did they break the law? Are they immoral heathens? I'm not saying that the answer to either of these is yes, but isn't it interesting that I'm the only one asking such questions?" This post is really the ultimate in weasel-y, passive-aggressive muckraking. If you've got a point, make it.
jack-r-abbit 12y ago
It is unclear to me if one could pull the same thing at an actual hotel or not. Assuming you could find a hotel that had a room available for more than 30 days, would they book you for that long? Or do they already have a policy against that for this very reason? Or do they have some different protection under the law that makes it easier to make you leave when your stay has ended?
- tzs 12y ago
  There are different rules for hotels/motels. In particular, if the manager has a right of access and control, and all of the following are true: • occupancy of less than 7 days is allowed (this doesn't mean your occupancy has to be less than 7 days) • a fireproof safe is provided for residents' use • it has a central telephone service • it has maid, mail, and room service • it has food service provided by a food establishment on or next to the hotel/motel grounds and that is operated in conjunction with the hotel/motel, then California classifies you as a guest, not a tenant, and no matter how long you stay there you can be kicked out as soon as you fail to pay, with no need for any kind of eviction proceeding. More details here: http://www.dca.ca.gov/publications/landlordbook/whois.shtml http://www.dca.ca.gov/publications/landlordbook/whois.shtml
sliverstorm 12y ago
These scenarios are why AirBnb can make money (IMO). If you think about it simplistically, AirBnb sidesteps regulation. As a result, the biggest use-case for AirBnb is leases that are supposed to be against regulations. AirBnb can't avoid messes AND regulations. Avoiding regulations is their profit model! With that comes messes. But that's OK for them- they have pretty successfully outsourced the risk to their hosts. That's the thing that annoys me the most about Uber and AirBnb. They are no fools; they know what they are doing. And when you boil it down, what they are doing smells a lot like what the banks did running up to 2006- socialize the risk, privatize the profit.

by gerner 12y ago

_delirium 12y ago

I'm not sure these are "never before seen corner cases". This kind of stuff is pretty much Landlording 101, and it's standard practice for someone engaged in renting a property to know about eviction laws. This person wasn't even engaging in what you might call the new, casual-sharing-of-personal-possessions style of rental, where someone rents their own personal apartment out occasionally while they're on vacation. She was just doing the old-school landlord thing: she bought an investment property she did not live in, and was renting it full-time for profit. That is a line of business in which you can buy and read books, customized to your state, telling you exactly the basics you should know about!

sanderjd 12y ago
I think you're completely right, but it's worth noting that removing barriers to entry into existing businesses is a very viable business model. Even "buying and reading books customized to your state" is a barrier to entry that a company like AirBnB could help with (though they don't seem to want to go that direction).
pstuart 12y ago
But Airbnb, as a service, should at least filter/advise for knowingly stupid things like renting out for such an extended period.
- chimeracoder 12y ago
  If they're going to that effort, then why can't they filter for knowingly illegal things, like short-term rentals in cities in which this practice is illegal? I don't see them doing either one anytime soon, since it presents a major PR/deniability problem.
  - pstuart 12y ago
    They're pretty much knowingly illegal as a business model, but that doesn't mean they can't protect their own users from simple abuses.
URSpider94 12y ago
This kind of stuff is pretty much Chauffeuring 101, and it's standard practice for someone engaged in driving for hire (through Lyft or UberX) to know about hack laws. This kind of stuff is pretty much Retailing 101, and it's standard practice for someone engaged in selling items on the open market (through eBay) to know about business laws. What's "disruptive" about all of these services is that they enable people who wouldn't ordinarily be willing to go through all the red tape and training to enter a previously specialized business, to do so with a few mouse clicks. One could argue that all of these services (AirBnB, Lyft, eBay) are targeted at amateurs who want to dabble, but we all know that they make a significant amount of revenue from people who are using their platforms to run full-scale businesses, in many cases without securing business licenses, liability insurance, paying relevant taxes and fees, etc. I don't know if I'd say that the services themselves are responsible, but they are certainly happy to take profit from high-volume vendors operating outside the law.

7Figures2Commas 12y ago

> In some ways, this is the dark side of disrupting established industries: legal protections aren't in place yet... That's simply not true. The homeowner voluntarily agreed to rent her home to someone for more than 30 days. On the 30th day, that person became a tenant and gained certain rights under the law. The homeowner still has legal rights of her own, but the nature of the rental she agreed to means that she will have to engage in a more involved process to evict the tenant. If the homeowner did not want to deal with this type of scenario, she had every right not to rent her home for 30+ days. In short, this has nothing to do with disruption or a lack of legal protections. Notwithstanding the fact that some AirBnB properties are being rented in violation of local laws and leases, AirBnB is simply a channel for marketing rental properties. The law already provides landlords and tenants with protections and obligations and every serious party engaged in the rental business is familiar with these laws. This story has everything to do with a homeowner engaging in a business she clearly knew nothing about.

sanderjd 12y ago
> every serious party engaged in the rental business is familiar with these laws AirBnB's disruption is to enable unserious parties to engage in the rental business, so the negative effects of unserious parties engaging in the rental business can pretty reasonably be laid at the feet of that disruption.
- _delirium 12y ago
  For really casual renters I can see that: I think the "couchsurfing for money" type of AirBnB really is new, and brings in casual renters looking to rent out a couch or a spare room, or occasionally a spare apartment while they themselves are gone. But dabbling into full-time landlording, where you buy an apartment just to rent it out, is not really new or newly enabled by AirBnB. It's not like VRBO checks your sanity either; if you want to not pay attention to rental laws and get screwed on VRBO you could do that, too. Probably that has even happened, but nobody cares, because there's a cultural expectation that if you're renting an investment property on VRBO, you have an idea of what you're doing, and if not, that's your problem.

thrownaway2424 12y ago

You seem to be confused about what legal protections are or are not in place, and whom the law protects. This isn't some loophole or edge case in the law, this is an explicit protection for lessee which is written into the law for a specific reason. "Legitimate slumlords", if you can tolerate such a concept, are well aware of this provision, and will bodily remove you and your belongings from their flop houses on the 29th day. This is just an example of a person with barely enough capital to dabble in capitalism and lose. They thought they were going to flip a condo into rental income, skirted the law -- one wonders what other shortcuts were taken; did they have an occupant's insurance policy or a landlord's policy? did they take out a mortgage under the pretense of occupancy? Are they taking income tax interest deductions and claiming homeowner's property tax exemptions -- and pretty much got what they had coming.

mattdeboard 12y ago
"Did they break the law? Are they immoral heathens? I'm not saying that the answer to either of these is yes, but isn't it interesting that I'm the only one asking such questions?" This post is really the ultimate in weasel-y, passive-aggressive muckraking. If you've got a point, make it.

jack-r-abbit 12y ago

It is unclear to me if one could pull the same thing at an actual hotel or not. Assuming you could find a hotel that had a room available for more than 30 days, would they book you for that long? Or do they already have a policy against that for this very reason? Or do they have some different protection under the law that makes it easier to make you leave when your stay has ended?

tzs 12y ago
There are different rules for hotels/motels. In particular, if the manager has a right of access and control, and all of the following are true: • occupancy of less than 7 days is allowed (this doesn't mean your occupancy has to be less than 7 days) • a fireproof safe is provided for residents' use • it has a central telephone service • it has maid, mail, and room service • it has food service provided by a food establishment on or next to the hotel/motel grounds and that is operated in conjunction with the hotel/motel, then California classifies you as a guest, not a tenant, and no matter how long you stay there you can be kicked out as soon as you fail to pay, with no need for any kind of eviction proceeding. More details here: http://www.dca.ca.gov/publications/landlordbook/whois.shtml http://www.dca.ca.gov/publications/landlordbook/whois.shtml

sliverstorm 12y ago

These scenarios are why AirBnb can make money (IMO). If you think about it simplistically, AirBnb sidesteps regulation. As a result, the biggest use-case for AirBnb is leases that are supposed to be against regulations. AirBnb can't avoid messes AND regulations. Avoiding regulations is their profit model! With that comes messes. But that's OK for them- they have pretty successfully outsourced the risk to their hosts. That's the thing that annoys me the most about Uber and AirBnb. They are no fools; they know what they are doing. And when you boil it down, what they are doing smells a lot like what the banks did running up to 2006- socialize the risk, privatize the profit.