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Lucrative AirBnB Subletting Falls Short with some Denver Landlords


By Jonathan - March 23, 2016

Have you ever asked yourself, “who’s really leasing my home?” With scarce private-owner rental inventory in Denver, some tenants are capitalizing on the market by subletting their properties via AirBnB without the owner even knowing. Certain properties in popular neighborhoods can fetch thousands more per month than the monthly base rent for the convenience of a short-term stay in a premiere property. If your lease agreement with your tenant falls short of sublet language, you may unexpectedly find your home on a short-term rental stay website and expose yourself and your property to huge risks and liabilities.

Many property owners are taking advantage of short-term rentals through the lucrative AirBnB and VRBO business, but Denver plans on releasing proposed rules in May 2016 to regulate and tax owners. A recent Denver Post article shares viewpoints on the subject and highlights the obvious regulations from a physical real estate perspective to include safety requirements for smoke and carbon monoxide tetectors as well as rules for noise and trash collection. The proposed rules would also allow long-term renters to offer accessory dwelling rooms for short-term rental, or the entire home, if they have the landlord’s permission.

One of the reasons prompting me to blog about “under the radar” subletting in Denver is because I recently learned of a Client’s unfortunate experience with a well-qualified tenant. The applicant passed the tenant screening process, met with the owner in person and signed a 12-month lease (unfurnished condo proeprty) stacked with language prohibiting any short-term subletting. It took less than a month for the owner to find their condo being advertised and listed on AirBnB. The worst part is the tenant is a licensed real estate broker in Colorado and should have known better. It’s a crappy situation when neighbors, HOA’s and owners get stuck in the middle of this. Once a default letter is sent, HOA’s typically levy fines on owners (leases can protect owners from incurring fines as a result of a tenant’s lease negligence) and the situation can even escalate to an eviction process.

While owners are not currently regulated by the city, certain forces are putting pressure on owners offering short-term stays. The obvious is neighborhly pushback, especially with properties offering a great entertainment setting where noise can be an issue. Second, many Home Owners Associations have rules prohibiting short-term leases and neighbors will be quick to point out an illegal sublet and fine owners for not following the HOA rules and regulations. The tight supply of private-owner long-term rental inventory available in Denver is another force renters are struggling with. Whether you’re for or against regulations on short-term rentals in Denver, the dynamic of real estate, travel and the way we share time with friends and family is ever changing. Owners must be diligent in knowing how their properties are occupied, shared and used to ensure an enjoyable living environment for all.