Tuesday, November 22, 2016

SF Landlords Being Left Holding The Bag For City Fines Issued In Connection With Their Tenants Who Illegally Short-Term Sublet Apartments On Websites Like AirBnb, HomeAway

In San Francisco, California, KNTV-TV Channel 11 reports:
  • A bright orange “Notice of Violation” was tacked to the front of Sondra Halperin’s Alamo Square condo building this past May.

    The tenant who rented her condo was illegally offering short-term rentals on Airbnb — and the city busted him. “It was very surprising to me,” Halperin said. “And it was scary.”

    Scary because the city was fining Halperin $484 a day until her tenant took down all rental listings from short-term rental sites and canceled all future bookings.

    Halperin said getting the tenant to cooperate was not easy. And in the end, her total fine was about $22,000. The homeowner was upset that she had to pay for her tenant breaking the law. “I was unemployed at the time,” Halperin said. “I couldn’t even focus on a job search, I was too consumed with this.”

    Kevin Guy runs the San Francisco office of short-term rentals. He says city code mandates that he fine the property owner, not the tenant. “When we conduct enforcement, we conduct enforcement and issue violations against a specfic property, not an individual person,” said Guy.

    Since last June, Guy’s office has issued $874,000 in fines to homeowners for illegally renting to people through sites like Airbnb and HomeAway. Guy says only about 10 percent of violators are tenants. But when they are, it can be tough getting them to stop breaking the law.

    Vo Duong knows all about that. His tenant illegally hosted paying HomeAway guests staying in his Forest Knolls home. When the city caught on, Vo says he told his tenant to move out, but he wouldn’t. The tenant had thousands of reasons to stay.

    “He was making more money staying here, knowing that the fine wasn’t going to affect him,” Duong said.

    Here's the math: Vo says his tenant was paying him $7,000 a month, but was making $18,000 to $20,000 a month on short-term rentals. Duong later learned this was business as usual for his tenant. “This person’s notorious for doing this,” Duong said. “He has multiple rental locations.”

    City officials confirmed that Duong is not the only victim of this tenant. The city calls him a serial tenant -- someone who rents one or more properties just to cash in on the short-term rental craze.

    All over the city, NBC Bay Area found properties that Duong's tenant had leased, then illegally rented out short-term. We tried to track down this serial tenant, using his name and apparent alias, but we didn’t find him.

    And even though the city knows what this serial tenant is up to, it still fined Duong $12,000 for the illegal activity at his house. Moving forward, officials plan to turn over serial tenants to the city attorney’s office.

    “We want to pursue enforcement against that individual person,” Guy said.

    We talked to some San Francisco supervisors to see if they think the city code needs to be revised, to protect homeowners in situations like these. No one has yet taken up that issue.

    Until that happens, if it does, Duong has a grim warning. “I want to make sure that all landlords know, that whenever they rent to people, as soon as they receive this letter, what they have to do is immediately evict the tenant,” he said.

    Guy said his office will give landlords a break on fines, if landlords can prove they’re actively trying to get the tenant to stop the illegal renting.

    Guy couldn’t comment on specific cases, but Duong's fines were not reduced - he owes the city $12,000. Halperin, however, got lucky. She asked a supervisor to help her out, and he did. The city reduced her fine from $22,000 to $1,000.
Source: San Francisco Homeowners on the Hook for Thousands in City Fines (They say their tenants are responsible, not them).

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