Airbnb Beats Lawsuit over 'Illegal' Sublets

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On Dec. 29, Airbnb Inc. beat a lawsuit filed against it by by Apartment Investment & Management Co. (Aimco), one of the largest residential landlords in the US. Plaintiff alleged that Airbnb is responsible for  enabling tenants to break their leases by allowing unauthorized sublets via Airbnb. The case highlights the importance of having the website terms of use drafted correctly, in addition to utilizing statutory protections available to website owners/operators.

Aimco sued Airbnb last year, alleging that tenants at its high-end apartment complexes in Los Angeles, where a unit can rent for as much as $17,000 a month, have been complaining about noisy Airbnb guests who were allowed to stay at the units in violation of the leases that prohibit subletting. That caused damages to Aimco because it had to hire more staff to find and evict illegal Airbnb visitors.

However, a federal judge in Los Angeles ruled that Airbnb is protected from liability by the Communications Decency Act. It is a 1996 law that shields online service providers from liability for the content users post. So, it is legal for online platforms to host “illegal” listings, as long as it’s the platforms’ users  (and not the platform itself) provides the content of those listing. In the present case, it’s Airbnb hosts the ones who are providing the content of their listings on the site.

Airbnb is further protected from liability because its website terms of use state that hosts are responsible for compliance with local laws and guaranteeing that their bookings “will not breach any agreements with third parties.”

For years critics of Airbnb (landlords and competitors) have argued that this business model operates as an illegal hotel that violates zoning laws and disrupts neighborhoods. Even though Aimco has lost the present lawsuit, it also has a separate one filed against Airbnb in Florida.

Here is a copy of the dismissal:

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