Before LISTING your condo on Airbnb, read this

ATTY. RAYMUND MARTELINO
/in , /by

Sales and marketing agents of property developers include in their pitch to property buyers the fact that buying property is good investment. Obviously, the value of real property appreciates regularly and consistently over a period. A property owner can also lease the property and earn from the rent. The lease may be long-term or short-term. Some say that a good way to lease property is to put it on Airbnb.

In 2015 Tom Goodwin, head of Zenith USA, said “Uber, the world’s largest taxi company owns no vehicles; Facebook, the world’s most popular media owner creates no content; Alibaba, the most valuable retailer, has no inventory; and Airbnb, the world’s largest media accommodation provider, owns no real estate. Something interesting is happening.”

Indeed, it is very interesting how these technology companies have changed the way we live.

Airbnb was founded in 2007 in San Francisco as an online home-sharing platform. The platform allows users to choose and book online for properties listed in 650,000 cities and more than 190 countries. The service promotes personal service and a competitive price point.

Airbnb stands for “air bed and breakfast.” The founders — Brian Chesky, Joe Gebbia and Nathan Blecharczyk — started with using an air bed to host their guest in their home coupled with breakfast. A “bed and breakfast” is a lodging arrangement that is cheaper than a hotel accommodation and provided by a host, often the owner. Thus, the personal touch.

Is Airbnb legal in the Philippines? Yes it is. The Civil Code provides that an owner has the right to enjoy and dispose of a thing without other limitations than those established by law. The owner of a property has the right to lease it. A lease is defined as a contract by virtue of which one person binds himself to grant temporarily the use of a thing or to render some service to another who undertakes to pay some rent, compensation or price.

So far, there is no law or regulation over short-term lease service for home-sharing platforms like Airbnb. Will we see Airbnb going down the direction of Uber and Angkas where the regulations of government seem to have caused the latter’s decline rather than growth?

There are cities in the world that have already imposed regulations against Airbnb and similar sites. New York requires renter data to be turned over to the state. A Santa Monica, California ordinance holds companies responsible for booking rentals of residences not licensed by the city. Paris imposed a 12.5-million euro fine against Airbnb on alleged illegal advertisements.

In the Philippines, the Department of Tourism is still considering regulating the bookings made through these platforms. Taxes also have to paid for leasing real estate. I have also encountered client inquiries about some condominium associations and developers restricting the use of properties, particularly on short-term leasing like Airbnb.

Property buyers should always bear in mind that they must abide by conditions and restrictions on the sale of the property. Prudence would dictate that a buyer should inquire about the restrictions in the Master Deed or Deed of Restrictions over a property. Most developers limit the use and enjoyment of the properties for residential purposes only. Homeowners and condominium associations can and may enact rules to ban home-sharing, short-term lease or Airbnb. Thus making home-sharing or short-term leasing like a hotel a prohibited act.

Questions have been raised as to how safe and secure these home-sharing arrangements can be. There have been incidents of theft, racism, disturbance of peace, damage to property in properties offering Airbnb causing alarm. Then there is the commercialization of the condominium or subdivision community.

Admittedly, Airbnb and the concept of home-sharing and short-term leasing provides convenience, affordability and personal service. But the negative concerns have to be addressed by the industry and government regulators. This should be done without necessarily killing the innovation or stunting its growth and development.

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