Big Apartment Landlord Sues Airbnb
Apartment Investment & Management Co. alleges Airbnb is helping tenants breach their leases
One of the largest U.S. apartment landlords has filed civil lawsuits in California and Florida against short-term rental website Airbnb Inc., alleging its tenants are renting out units on the site in violation of their leases and are creating unsafe conditions for other tenants.
Apartment Investment & Management Co., or AIMCO, which owns or manages roughly 50,000 apartments across the U.S., is seeking an undetermined amount of damages, a spokeswoman said.
AIMCO Chief Executive Terry Considine said in a written statement that Airbnb is helping tenants breach their leases, which prohibit short-term rentals.
“It is not acceptable to us that Airbnb actively promotes and profits from deliberate breaches of our leases, and does so in utter disregard of the disrespectful and unsafe situations created for our full-time residents and their families,” Mr. Considine said.
Airbnb plans to fight the lawsuit, said Nick Papas, a spokesman for the company. “This attack on the middle class by powerful interests is wholly without merit,” he said.
This is the first instance of a major landlord suing Airbnb, according to Conor Wagner, an analyst at real-estate research firm Green Street Advisors. He said other landlords might decide to pursue the same tactic if they can’t win cooperation from Airbnb.
“This is all somewhat unprecedented for them,” Mr. Wagner said. “If you don’t want this going on in your building, and Airbnb won’t desist, then this might be their only recourse.”
AIMCO said its buildings have suffered property damage, nuisance and disturbance, and loss of revenue. It is seeking compensation for losses and is asking the courts to forbid Airbnb from listing units in its buildings in the future.
Airbnb has faced an uphill battle in building relationships with apartment landlords. Last fall it unveiled a program that would give landlords a cut of the revenue if they permitted Airbnb guests to stay in tenants’ apartments.
The program initially received a cool reception from landlords, who were concerned that transient residents would change the character of their buildings.
In many cities, regulations limit how many days per year a dwelling can be rented unless the tenant is present.
Airbnb, valued by investors at $30 billion, has been working to shore up regulatory hurdles city by city ahead of an eventual initial public offering.
It suffered a setback in New York City last year, when Gov. Andrew Cuomo signed a law allowing fines of up to $7,500 on tenants who break rules that prohibit listings of less than 30 days in multiunit buildings. The city this month began targeting some offenders with fines.