The Lesson of the Airbnb Squatter: We're All Landlords Now

Airbnb is all about treating strangers like house guests. But when one such house guest overstayed his welcome at a lovely looking Airbnb rental in Palm Springs, Calif., he decided to describe himself in another way: as a tenant. He is not paying and he’s refusing to leave, according to Business Insider’s account of the situation.

Cory Tschogl, the Airbnb host who rented out the condo, told Business Insider that she was surprised to learn that, legally, she has gone from being an Airbnb host to a normal old landlord. She says she hired a lawyer to try to get the reluctant guest to move along but was told that because he had already stayed in the place for 30 days, his term had aged into all sort of tenant protections granted under California law.

Conflicts such as this drive old-fashioned landlords crazy. California property owners who want to send tenants packing have to file something called an “unlawful detainer” lawsuit, which can be resolved in about a month, according to the California Department of Consumer Affairs. In the meantime, it’s illegal for Tschogl to follow through on her threat to cut off the utilities. If she does win, she could be entitled to back rent. (That would probably take considerable time, money, and stress to collect, if she can collect anything.) Indeed, her guest could be fined a whopping $600 if a judge finds that he has “acted maliciously in not giving up the rental unit.” Tschogl isn’t going to profit from this situation.

Airbnb hosts have had all sorts of problems related to local laws, destructive tenants, and sex parties. The company attempts to reduce the risks people are taking by, for instance, offering to reimburse $1 million worth of property damage. It doesn’t promise to remove risk entirely.

Not that it shouts this from the rooftops. Companies making the sharing economy possible aren’t falling over themselves to catalog the costs and risks that come with their service. Uber, for instance, recently boasted that its drivers in New York make over $90,000 annually, a striking number that doesn’t sound quite as impressive once you factor in depreciation of the vehicle, gas, maintenance, and insurance. Similarly, there are costs to renting out an apartment on Airbnb. The company takes pains to note that it isn’t offering anything akin to homeowners’ or renters’ insurance. Its damage protection doesn’t cover liability or some other things, and the host is responsible for wear and tear.

None of this is quite as sensational as someone refusing to get out. But Tschogl’s dilemma serves as a reminder that when you go into business in the sharing economy, you’re going into business. Just because companies such as Airbnb and Uber make it easy doesn’t mean they’ve made it foolproof.

    Before it's here, it's on the Bloomberg Terminal.