By: Tyler B. Duff, Gordon & Rees Scully Mansukhani, LLP

The short-term rental of apartments and condominiums through online home-sharing services such as AirBnB has become increasingly common. Although the rentals provide tenants and condominium owners with a source of income, they also provide landlords with uncertainty regarding the short-term renter’s use of the premises. Many short-term renters may be respectful of the property and its tenants, but all it takes is one inconsiderate short-term renter to have a landlord’s patience with the concept of short-term rentals exhausted.

What Can a Landlord Do to Gain Control Over Tenants’ Short-Term Rentals?

Fortunately, there are legal options. Landlords should first review the lease agreements they have entered into with current tenants for sublet clauses. A sublet clause restrains a lessee from receiving payment for a person’s occupation of the premises they rent. The restraint may vary from a flat-out prohibition of subletting to notification or approval requirements prior to subletting. Such language likely governs short-term rentals, which are subleases by their nature. If the clause is already included in current tenant agreements, landlords may notify the tenants of the existence of the clause and the consequences for failing to abide by the terms of their lease agreements.

If the lease agreements are without a sublet clause, then landlords should amend their lease agreements or revise their renewal agreements to include a provision governing subletting that is tailored to their specific needs. For instance, a landlord wishing to permit long-term sublet arrangements but prohibit short-rentals would require a lessee to covenant that the premises will not be subleased for any period less than 30 days. The sublet clause is a flexible tool for governing short-term rentals. 

What Can I Do About Short-Term Rentals If I Own a Condominium?

Owners of condominiums may be similarly concerned regarding short-term rentals listed by owners in their homeowners’ association. An owner frustrated with a neighbor’s short-term rental habits should review their condominium association’s bylaws and covenants, conditions and restrictions. It is quite possible that those agreements already have provisions governing the rental of units in the building, which would include short-term rentals. If not, the owner may desire to contact their condominium association to discuss the governance of short-term rentals by homeowners.

What If My Tenant Violates the Terms of the Governing Agreement?

Regardless of what a lease agreement or the governing documents of a condominium association might state, there exists a very real possibility that tenants and homeowners may violate the terms of the governing agreements. Without an admission by the tenant, there may not be evidence for condominium associations or landlords to substantiate claims of short-term rentals in violation of an agreement otherwise.

For example, in the City of Chicago, ordinances may offer support to those looking for proof of violations. A recently passed Chicago ordinance now makes it easier to track those listing their homes as a short-term rental by requiring the home-sharing service to provide the city a list of persons using the home-sharing service. Condominium associations and landlords may access this information to determine if short-term rentals are occurring in their buildings. The laws and ordinances governing these issues are new, and also are very specific to the state and/or local jurisdiction. Therefore, it is important to discuss such issues with counsel.

Next Steps

If a lease agreement or the governing documents of a condominium association are being violated, then the landlord or condominium association should seek guidance on the legal remedies available to them. Although short-term rentals have provided a whole new host of legal issues, some of those issues may be addressed through already existing legal processes, such as formal eviction. It is important that landlords and condominium associations seek professional legal guidance on the processes for addressing violations of agreements with tenants and homeowners.

For more information or any questions, please contact Tyler B. Duff, Kyle P. Kickert, or Jonathan M. Boulahanis of Gordon & Rees Scully Mansukhani, LLP.

Disclaimer:

The purpose of this article is to convey general information, and not for the purpose of providing legal advice. You should not consider any information herein to be legal advice, and you should not act upon any such information. Readers should obtain specific legal advice from their attorney in relation to any decision or course of action contemplated. The law firm of Gordon & Rees Scully Mansukhani, LLP, and its members provide legal advice only upon the execution of a formal attorney-client retention agreement establishing an attorney-client relationship.