This past week the news has been buzzing about a Harvard graduate that Air BNB'd a mansion in Brentwood, only to over stay her welcome, not pay any money for over 500 days, and demand the owner pay her $100,000 to move out. You can read the article here.
What this whole debacle for the landlord has highlighted- don't try to skirt the law.
Many cities in Los Angeles have bans or drastic restrictions on short term rentals listings on websites like Air BNB and VRBO. Some of these cities have registration requirements, limitations on how many listings can be done in a year, how long guests can stay and complete bans on certain properties such as apartments. Landlords need to be very careful of listing rent controlled apartments on short term rental sites because the guests can over stay and it usually requires going to court to get the guests out. Before listing a short term rental you should research the city it is in and if there are any restrictions.
The next issue with the Brentwood situation, the landlord had unpermitted improvements. There have been countless matters I have dealt with where landlords lease illegally (unpermitted) units or conversions, only to get sued by the tenant for back rent, relocation, and attorney fees. I again go back to my philosophy "don't do favors with real estate." Many of these situations start out as temporary or a "favor" to someone in need, but leasing unpermitted dwellings can get you in trouble. However, it is usually possible to get conversions legalized but you need to go about it the right way.
To do things by the book can be time consuming and expensive, but often times so can the results of getting busted for skirting the law. Making income on residential property in a place like Los Angeles, or really any large metropolitan area, requires the landlord to do their due diligence in getting educated on what they can and cannot do.
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The information in this post is for general information purposes only. Nothing on this post should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
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