Landlord’s Permission to List Unit on Airbnb Ruled Irrelevant (and Illegal)

Joelle Kraft lived in a rent-controlled one bedroom unit in Venice, California.  She had an agreement with her original landlord that permitted her to list the premises on Airbnb:

This Agreement is in addition to the existing lease agreement between LANDLORD and TENANT.  This agreement is strictly a written permission allowing Tenant the ability to host Guest(s) through the website airbnb.com at the Tenant’s discretion without violating any Rental Lease Restrictions that may exist in the effective Lease Agreement between Landlord and Tenant . . ..

Turns out though that a subsequent landlord – Louise Chen – wasn’t so keen to the home-sharing idea, and filed an unlawful detainer action against Ms. Kraft in Santa Monica Trial Court.  Plaintiff-landlord alleged Ms. Kraft illegally sublet the unit by allowing subtenants and or short term renters to reside there, and sought summary judgment on the grounds Ms. Kraft was operating an illegal bed and breakfast or transient occupancy structure.

Judgment was entered in favor of the landlord, Ms. Chen, and Ms. Kraft, unrepresented by counsel, appealed.  Earlier this month the Superior Court, Appellate Division, affirmed.

Plaintiff’s unlawful detainer claim was based upon the theory of illegal purpose, provided for in both the California Code of Civil Procedure and Los Angeles’ Rent Stabilization Ordinance, which permits an action in situations where the tenant is using or permitting premises to be used for any illegal purpose.

Landlord provided evidence (including Ms. Kraft’s deposition testimony) that (i) the unit was located in a zoning area where short term rentals are prohibited, (ii) Ms. Kraft was operating a bed and breakfast and/or a transient occupancy residential structure, and (iii) her use of the premises in this matter was illegal and violated zoning restrictions contained in the Los Angeles Municipal Code.  The appellate court determined the landlord consent quoted above was not dispositive because it constituted an illegal contract in violation of existing regulations, and thus was void and unenforceable.

As a tenant (landlords too), it is important to be familiar with applicable zoning laws before engaging in what may be unconventional use of rental property.  If you feel the need to request a separate side agreement permitting certain usage of the property, that’s a pretty good sign that local law might have something to say about the conduct too.  As demonstrated here, agreements contained in privately negotiated contracts (i.e., leases or ancillary documents) can be rendered void by municipal prohibitions.

Furthermore, and perhaps more importantly, had a loss occurred here involving a home-sharing guest, I suspect potentially applicable insurance policies (landlord’s and/or tenant’s) may have excluded coverage for resulting claims in light of the illegal acts described here.  From a risk management perspective, it would be prudent for prospective landlords and tenants to examine potentially applicable insurance policies in addition to local zoning laws before entering into any private agreements.

Posted in Home Sharing, Litigation, Zoning
One comment on “Landlord’s Permission to List Unit on Airbnb Ruled Irrelevant (and Illegal)
  1. What I do not understand hear is how those statutes apply to the tenant. Her lease was a month to month tenancy and the LARSO only requires that the tenant get permission to sublet from the owner. They do not restrict or govern the length of stays. The tenant was in compliance with the LARSO. 15109a)4) using the premises for any illegal purpose, this allows a landlord to bring an action based on a “theory”, a homeowner can only be prosecuted by the city attorney and they will not lose there home if they are found to be violating an ordinance. Why was this not redirected to the housing department. The court had no jurisdiction to act. If the tenant had been cited by the city before the landlord served the 3 day notice, maybe the tenant would have not continued. This was a private action by a citizen who is acting as a citing officer charging them with a crime and then taking the role of the city attorney prosecuting this person for committing a crime. Is this what the legislature intended when drafting 15109a4. Landlords no homeowners will not lose there home if they are cited or even prosecuted and found guilty. Hosting guests on arbnb does not admit a crime. This language does not say under 30 days. Airbnb gusts can stay longer than 30 days. And if they do then the landlord can charge more rent and that person becomes a tenant. How can you apply the restrictive residential R-1 laws to a multifamily building. The building is not allowed in that zone. The protections that the LARSO ordinance is supposed to give to tenants was precluded by the buildings illegality itself. It is impossible for Ms Chen to ever be in compliance with the zone because she has 4 family’s under one roof in a 1 family zone. The landlord was able to leverage the restrictive zoning laws and apply it to the tenants use of the premises The apartment building should not exist in that zone in the first place. The less restrictive zoning code that would have applied to this building if it were located were it can only be allowed to be located under the LAmc this use may not have been illegal and the tenants lease would not have been striped The tenants was prosecuted for an alleged violation of a zoning ordinance. There was no expert witness , a citing officer or complaint by neighbors or other tenants. There was only the landlords will to enforce public policy against a tenant who is legally residing at the premises who was current in rent was paying her taxes to the city had gotten written permission from the lanlord reguired by the LARSO and has been living and sharing her unit without any complaints or a single occurrence or incident that would prompt this kind of extreme and harsh punishment and who that tenant is very much a part of the class of people it I drafted to protect. The broad interpretation of the LARSO 15109a4 using the premises for any illegal purpose may allow zoning ordinances, however did the administration intend to give lanlord a the police power to enforce public policy against a tenant. The preservation of the neighborhood was far more important than the tenants right to occupy a unit in a building that Is not allowed to exist in that neighborhood. . (Illegal). The court ousted a purported scofflaw in the name of public policy. The landlord is now free to raise the rent or do Airbnb because it is perfectly legal under the LARSO as long as she complies with the allowable evictions, vacancy decontrol allows her to raise the rent after every stay. And they technically are not tenants until they stay over 30 days. However those legal rules under the LARSO can not be applied because the building is located in a R-1 zone. So she is allowed to break the law as long as she does not break the law. She has authority under the laws that only apply to this type of multi family building to evict a tenant by enforcing laws that govern the use of single family residence. That is the best of both worlds for the landlord. The tenant had no chance of even challenging the validity of the ordinance because the arena was an unlawful detainer. The court after accepting her theory of an alleged illegal purpose has to act in evicting. granted immediate possession to the lanlord. It was an administrative hearing to determine if a zoning violation was being committed and if the lanlord convinces the judge not jury to this fact then get back to what the real issue is possession. The court was in no position to act the want of jurisdiction by the lanlord over this matter being solely and wholly an administrative zoning matter needed to take it there first. I think that is what the lawmakers would have intended a lanlord or anyone else to do in this type of situation arises. Not to sanction a eviction without first seeking relief from the governing agency. Remenber there was no actual material citation or violation from the city. There was no reported activity from any other person or the public in regards to,that property or the use of the property for something other than living. This was initiated by a private party , a lanlord acting under the authority of,the LARSO to protect the public from alleged violation. The lanlord provided evidence that the building was in direct violation of the ordinance by being a multi family building in a r-1 zone. She provided a tax certificate that only proves that the tenant was paying her taxes. They were not evicting her for,that. And the testimony of her deposition was a leading question. ” so would you say that it is an arbnb , an Airbnb business isn’t it,” she answered yes. Who would not say that Airbnb is not a business. They are a internet based business named Airbnb.com and they are located in San Francisco ca, not in Venice . This is bullshit. No one gets evicted for paying their taxes or for sharing the space rented to them under contract. You can not do this without violating that persons rights to life liberty and the pursuit of happiness. The landlord can not bring a theory of a zoning violation without an actual violation from the city otherwise that individuals right to due process have been violated. Further more the tenants rights to peaceful enjoyment of the property have been violated by the landlord conducting this type of investigation without any reason to act. What has been accomplished by this. How has this eviction be justified. The preservation of the neighborhood outways the preservation of affordable housing cuts off a viable taxable income and effectively added to the homeless population. By not allowing a tenant to do something that we have been doing since the begining of American civilization. She used the premises as her home. Her only primary residence. That carried no wait at all. She was able to pay the rent. No consideration there, she was able to contribute to the community by paying taxes and she had been doing this for 3 years before the lanlord bought the building and never once was there a single incident or reported complaint. No nuisance. Does not matter. Everyone has to play by the rules or you have no right to a home. Unless you own it .

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