In November of 2013, Zak Stone’s Dad sat on an innocent looking swing in the backyard of their Airbnb rental home. The family has gathered at this house for a family Thanksgiving. Seconds later, one of the trees to which the swing was attached snapped, hitting Mr. Stone on his head and rendering him brain dead. A few hours later, the family took the agonizing decision to turn off his life support.

Two years later, Zak wrote an emotional account of the tragic event. After reading his heartfelt and thought-provoking article, it would have been hard for anyone to disagree with his argument that Airbnb was in some way responsible for his family’s devastating loss.

The important question Zak raises is this: Should Airbnb be responsible for enforcing safety standards at the properties listed on their platform?

Airbnb Health & Safety Requirements

It is highly unlikely that Airbnb will ever agree to be the enforcer of health and safety standards. Doing so would be a costly, administrative burden that would negatively impact their business growth and profitability.

But no one should expect Airbnb to be the enforcer of health and safety standards. Booking.com isn’t responsible for enforcing health and safety standard on the hotels, B&Bs, and vacation homes listed on their platform. Neither are VRBO or any other online vacation home rental company. Priceline and Kayak aren’t responsible for the safety of the planes you fly on after booking tickets on their respective platforms. So why should Airbnb be responsible for guest safety at the homes booked through their platform?

City Licensing and Regulations for Short-term Rentals

If not Airbnb, who should be responsible for guests’ safety while staying at homes rented as short-term rentals? The most obvious answer is local governmental agencies. Regulations for hotels and bed & breakfast establishments are set by local municipalities.

Regulations typically stipulate that an owner acquire a business license. To obtain a license for a new hotel, the owner must first undergo a building inspection to qualify for a certificate of occupancy.

Certificate of Occupancy. A certificate of occupancy is a document issued by a local government agency or building department certifying a building’s compliance with applicable building codes and other laws, and indicating it to be in a condition suitable for occupancy.

After the owner of the property acquires the certificate of occupancy and license to operate, there are very few municipalities that require ongoing, periodic safety inspections. It would appear, from initial research, that cities care more about collecting occupancy taxes than they do about guest safety.

Insurance Companies and Loss Prevention

While local municipalities appear to fail in enforcing safety at hotels and B&Bs, insurance companies provide a good backup. In order for a hotel owner to qualify for insurance (necessary for operation), it must meet insurance companies’ safety requirements.

Insurance companies don’t like to pay claims and they won’t insure unsafe buildings. They employ loss prevention engineers to inspect properties and identify areas of risk. Depending on the severity of the risks, the insurance company will either refuse to insure the property or insure it at a much higher premium. Either way, it’s in the best interests of the owner to fix any problems.

For once, corporate profits and consumers’ best interests are aligned!

Hotel chains employ their own loss prevention teams and hold their properties to an even greater safety standard than required by insurance companies. These companies know that major incidents involving guest injuries and deaths have a massively negative impact on hospitality brands. Guest safety is, therefore, a major part of their corporate strategy and they don’t wait to be told what to do by insurers or municipalities. They take full responsibility for the safety or their guests.

Evolving Short-term Rental Licensing Programs

Deciding how to regulate short-term rentals has been a struggle for local municipalities, but not because of guest safety concerns. Central to the debate is one of housing shortages and sharp increases in rental rates as available properties are being purchased solely for use as short-term rentals rather than long-term rentals for people living and working in the area.

Municipalities most affected by rising rental rates seem to be gravitating towards a policy of allowing short-term rentals for a maximum of 90 days per year and only in primary residences. In effect, this would end the undesirable behavior of investors purchasing property for use as short-term rentals.

In order to enforce new regulations, and collect occupancy taxes, municipalities have introduced short-term rental (STR) licensing programs. To obtain a STR license, hosts generally need to prove:

  • that the property is their primary residence,
  • that they are insured (insurance for Airbnb presents its own challenges),
  • and in some cases, for example, Austin, Texas, that they have obtained a certificate of occupancy or certified inspection.

While municipalities appear to be gravitating to a common standard for regulating which properties can be utilized for short-term rental, no such thing exists for regulating the safety of the premises.

Cities vs Vacation Towns

For hosts with properties in popular vacation towns, the issues are different. Affordable housing for low-income workers has always been a challenge in popular vacation towns and Airbnb has not made the situation any worse. In places such as Breckenridge, Colorado or Rehoboth Beach, Delaware, a large percentage of properties were offered as short-term rentals long before Airbnb. They have established rules and regulations governing short-term (or vacation) rentals.

You would think that these towns might provide some guidance for larger municipalities on how to regulate building safety. But that turns out not to be the case. Building inspections are not included in the short-term licensing requirements of many popular vacation towns in Colorado such as Breckenridge. Rehoboth Beach does require an annual safety inspection, albeit a self-inspection.

Airbnb hosts should not wait to be told what to do!

Whether regulations exists or not, no homeowner should complain about having to undergo a safety inspection prior to listing on Airbnb. In many cities, it’s already required prior to obtaining a rental license. This should be considered common sense, not burdensome regulation.

Guest safety should be a top priority. You may think your home is perfectly safe but how do you know what potential hazards exist? I highly doubt the owner of this property in New Orleans thought any differently from you.

Short-term renter dies in Bourbon Street balcony collapse

A man who fell to his death from a Bourbon Street balcony in the early morning hours of Nov. 19 was among a group renting a property through the short-term rental website Airbnb, and his fall might have been caused by a rotted railing, according to a New Orleans Police Department report.

Your Airbnb guests might include heavier people, infants, older people, or larger numbers of people. Whatever the case, they might be putting more stress on your property than it would during normal use. Unknown weaknesses in your property structure might be far susceptible to failure when exposed to new risks through your short-term renting.  

Airbnb Host Loss Prevention

Be proactive! Take responsibility for your guests’ safety. First and foremost, do your own safety inspection. Start with this home safety checklist and conduct a walkthrough of your property. Create a reminder to do this periodically, at least once per year.

If it’s been a long time since you had your building professionally inspected, now would be a good time to get it done. Find a local building inspector, preferably one certified by the International Code Council (ICC).

Remember, being insured is not enough. Even if your insurance company protects you financially if a guest is injured or killed or your premises, it won’t cover the emotional distress that such an incident will cause.
As Zak Stone says in his article: “I felt bad for our hosts: it was unlikely that their beloved view would ever inspire that feeling {of peace} again.” 

SharingMyHome Insurance Review Service

If you’re unsure as to whether your current home insurance is adequate, take advantage of our home insurance review service