The Airbnb Effect: Policing Short Term Rental Violations

The Airbnb Effect: Policing Short Term Rental Violations

Miami Condominium Associations Police Short-term Rental Violations

By Alex Martin and Paul Sanchez

The proliferation of vacation rental operators in Miami-Dade County’s popular tourist destinations has been making headlines lately – particularly due to the City of Miami Beach’s continued efforts to regulate and eliminate illegal short-term rentals. The day-to-day battle against unauthorized short-term rentals is playing out in the high-rise condominium towers on the beach and throughout Miami’s urban core.

Airbnb, VRBO, HomeAway and other vacation rental sites are increasingly appealing for Miami’s visitors, whether they are coming to town for major events like Ultra Music Festival and Art Basel or simply escaping cold weather destinations during winter months. These tourists appreciate the ease of use, cheaper daily rates and accountability that comes with the sharing economy. These renters book a stay without necessarily knowing that many of the associations governing Miami’s condominium towers outlaw such short-term rentals. That can create awkward situations where tourists show up to a condo building with suitcases after traveling long distances, only to be turned away by security with nowhere else to go.

The use of such services by owners or tenants at condo buildings can be extremely damaging to other owners and the condo association. From a practical standpoint, there are safety concerns that come with strangers staying at a condo building for a day or two and getting intoxicated, using building amenities, playing loud music at all hours and throwing parties with additional non-residents. Owners face financial repercussions if their building becomes known for excessive short-term rentals. It could become more difficult to refinance a unit or obtain lines of credit. Resale values – and the ability to sell units in general – take a major hit. Realtors are inclined to steer prospective buyers away from buildings that have the reputation of a frat house.

To avoid such instances, condo associations are hiring legal counsel to review or amend their bylaws to ensure the illegality of short-term rentals are explicitly addressed. Then, they rely on the association management company and its staff to root out the violations. Association members, property managers and building staff become de facto detectives. Policing measures include:

  • Aggressive monitoring. Management teams are monitoring short-term rental websites and looking for advertisements with images that show unique tiling or balcony railings or match the views specific to their building.
  • Train the staff. Run through scenarios with staffers so they know what key signs to look for, including the aforementioned visitor with suitcases or an individual or group of people walking around aimlessly because they do not know where anything in the building is. Make sure anyone who enters the lobby of the building is asked who they are there to see.
  • Take legal action. A strongly worded cease and desist letter can have a chilling effect. For operators who turn to these rental platforms to grind out a profit or cover expenses, the threat of legal action requiring defense counsel could be enough to get them to take the short-term renting elsewhere.
  • Reverse your reputation. Publicize successful efforts to eliminate short-term renting to the point that your building becomes known for being particularly unfriendly to Airbnb and its peers.

One condo community we oversee in Greater Downtown Miami had a major problem with short-term rental violations. More than 20 units were violating association rules in some form. Through a combination of monitoring and training, nearly all violations were eliminated in just a few months.

As long as Miami Beach, Brickell and downtown Miami remain internationally known destinations, the sharing economy will be prevalent in those areas. The good news is that developers are recognizing the demand for short-term rentals and specifically tailoring new projects for such uses in neighborhoods where they are allowed. That, combined with the continued efforts of municipalities and associations to get rid of illegal short-term rentals, bodes well for a future where no visitors are stranded with their suitcases and a ruined vacation.

Alex Martin is Regional Manager at KW Property Management & Consulting (KWPMC). Paul Sanchez is General Manager at the company. KWPMC is a Miami-based property management company that manages upscale high-rises, homeowners’ associations, garden-style townhomes and more, meeting the needs of nearly 80,000 unit owners.