The Internet has created innovative inroads into traditional
vacation lodging. Websites like Airbnb, VRBO and Flipkey provide
vacationers with affordable lodging in prime locations, furnished
with all the comforts of a home. But, while short-term vacation
rentals are a boon for travelers, they often create problems for
The rise of short-term vacation rentals has eroded the
affordable housing stock in many cities. Realizing there is more
money to be made in short-term renting instead of long-term
leasing, investors are now purchasing residential properties and
repurposing them as short-term rentals. In some instances,
investors have purchase entire apartment buildings to create
Airbnb-style complexes. The increase in short-term rentals and
corresponding decrease in housing stock has created a housing
scarcity, driving up rent in some cities where short-term rentals
As neighbors are replaced with tourists, there is also an
eroding effect on the residential character of neighborhoods.
Rental owners and vacationers simply do not have the same
investment in the neighborhoods that long-term residents do. Rental
owners have little incentive to invest in improvements beyond what
makes a property rentable. Likewise, renters have no incentive to
care for the rentals as a vested property owner would or conduct
themselves in a manner that long-term residents must to be a good
neighbor. As a result, continually parked cars, loud music, and
rampant littering from vacationers can be a constant source of
frustration to the neighborhood. Indeed, in some cases, formerly
peaceful neighborhoods have been converted to raucous vacation
zones where inebriated guests and late-night parties become the
norm. To add insult to injury, unlike hotels and motels, short-term
rentals in most jurisdictions may not be paying transient occupancy
taxes and other assessments that provide benefits to the
Short-term rentals also create other nuisance problems for
neighborhoods. The potential for increased profits has led some
owners to make unlawful modifications to their short-term rentals
in an effort to create multi-family dwellings in violation of
applicable building, housing and fire codes. The ability to acquire
higher occupancy by illegally converting a garage to a bedroom or
by adding unpermitted kitchens or whole stories becomes too great a
temptation. These illegal conversions not only create potential
health and safety concerns, but also exacerbate the unwanted
touristic activities mentioned above, which further frustrates
adjacent homeowners who did not sign up to live next to a
quasi-hotel, motel or bed and breakfast.
Municipalities do have tools to combat the problems created by
short-term rentals. Cities and counties should examine their local
codes to make sure they provide the necessary provisions to
regulate short-term vacation rentals and the problems they create.
In some case, zoning codes, including traditional definitions for
hotels and motels, will need to be modified to encompass this new
model of vacation lodging. Likewise, local nuisance definitions and
enforcement provisions will likely need to be expanded with
short-term rentals in mind. Communities that wish to permit these
rentals must consider how best to regulate them and must ensure
that they are paying transient occupancy tax and other assessments.
Some cities and counties may also have to enact new ordinances to
identify, control and mitigate the use and location of short-term
rentals with carefully tailored reporting, permitting, and
Where appropriate local ordinances are in place to control
short-term rentals, but owners ignore the law, or simply treat the
consequences of non-compliance as a cost of doing business,
municipalities must be prepared to pursue enforcement. In such
instances, nuisance abatement and receivership actions can be
effective tools against recalcitrant owners.
A trend, and now common practice, in the construction industry is for an owner or contractor to require contractors and subcontractors to name it as an additional insured on their commercial general liability insurance policies.
Foreclosure/Deficiency Judgment: where a foreclosing bank acquires in rem jurisdiction via service by publication in underlying foreclosure action, bank may still seek personal service over an individual to pursue deficiency judgment.
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