Airbnb sublets in S.F. land some renters in the doghouse

San Francisco-based company Airbnb connects travelers with potential hosts online and with its mobile app. It was supported by Y Combinator in winter 2009. Founders Nathan Blecharczyk, Joe Gebbia and Brian Chesky pose in Gebbia and Chesky's apartment on Rausch Street in San Francisco, where the company was born. less San Francisco-based company Airbnb connects travelers with potential hosts online and with its mobile app. It was supported by Y Combinator in winter 2009. Founders Nathan Blecharczyk, Joe Gebbia and Brian ... more Photo: Courtesy Airbnb Photo: Courtesy Airbnb Image 1 of / 9 Caption Close Airbnb sublets in S.F. land some renters in the doghouse 1 / 9 Back to Gallery

The apartment in the beating heart of the Castro was a huge success on Airbnb.

Gilbert, a hairdresser who needed help making his $1,920 rent, loved meeting new people and appreciated the extra money - sometimes $185 a night. When guests booked through the online marketplace for temporary lodging, he would crash on a friend's couch.

He hosted about twice a month until a letter arrived in May. It said that he violated his lease and had three days to vacate the apartment or face an eviction lawsuit.

"I didn't want to get into something nasty, and I didn't have any money to try to fight it," said Gilbert, who declined to give his last name. He negotiated to stay for a month and then moved out.

Thousands of San Franciscans make extra money by renting out their home or a room to travelers via Airbnb. Considering about two-thirds of city residents are renters, many local hosts don't own their places.

That has led to unpleasant surprises for some renters who list on Airbnb: notices from landlords threatening eviction.

"When tenants do Airbnb and we catch them, we serve them with eviction notices for violating their lease agreements," said Dave Wasserman, a San Francisco attorney who represents landlords. "Most rental agreements have outright prohibitions or restrictions on subletting."

Wasserman said he has filed 10 to 15 such notices for Airbnb use in the past six months. "It's growing - no question about it," he said.

Such notices are generally "three-day notices to cure or quit." They give tenants 72 hours to remedy the situation.

Tenants who quit Airbnb activities often can end the issue. However, some can't meet the deadline, perhaps because they are out of town or there's an Airbnb guest in their apartment, Wasserman said. In such cases, he moves ahead with the eviction process.

Paying tenants to move

But instead of actual evictions, the notices typically result in landlords paying rent-controlled tenants to move out.

"Landlords are pissed off that tenants are profiting off their properties," said Delene Wolf, executive director of the San Francisco Rent Board. "It makes them crazy: They're rent controlled, and the tenant is making more off their property than they can make."

For instance, Jenson Lam, who owns a duplex in North Beach, discovered that a long-term tenant who was on vacation had rented her apartment on Airbnb for $4,500 a month - triple her rent.

"It's called overcharging subtenants in rent, defrauding the landlord and profiteering off the apartment," he said. "But there are no penalties."

To avoid the expense and unpredictability of a jury trial for eviction, Lam said he paid the tenant $45,000 to move out.

Some attorneys said landlords overreach in trying to evict tenants, claiming illegal activity so they can sidestep the "cure or quit" notice.

For instance, Gregory Brod represented Airbnb hosts who paid rent $1,000 a month below market rate. "The landlords wanted any excuse to get them out of there ... so they could take advantage of the skyrocketing real estate market," he said.

The landlords ordered the tenants out immediately for violating city code that bars rentals of less than 30 days. That ordinance is rarely, if ever, enforced.

"It was absolutely a false pretense to evict," Brod said. "They decided to bastardize the administrative code to say, 'You broke the law, you're done and don't have an opportunity to fix.' "

Brod said he charged the landlord with harassment and wrongful eviction, and he negotiated a buyout for his tenant.

Airbnb's website reminds hosts to check their leases and local laws.

"Everyone who shares their space on Airbnb agrees to follow their local rules and lease agreements, and we provide information about these requirements," spokesman Nick Papas said in a statement.

San Francisco Board of Supervisors President David Chiu is crafting Airbnb-related regulations, such as mandating the payment of hotel tax. However, his bill would not affect lease agreements, said his legislative aide, Amy Chan.

Some renters who have incurred their landlord's wrath by listing on Airbnb say they were able to remedy the situation.

William Gradin, who lives at the nexus of the Castro and the Mission, listed his place on Airbnb but never actually hosted anyone.

"The landlord saw the listing and immediately sent me an eviction notice," he said. "It was a three-day notice put on my door for illegal hoteling."

Furious, Gradin hired an attorney and sent a strongly worded letter "making it clear that I would go to court to fight them and had enough funds to do so," he said.

He ended up subletting his place with the landlord's approval while he travels for three months.

Even tenants' attorneys said the landlords are sometimes justified.

"We know of at least five cases where tenants have rented out units not to live there, but just to list them on Airbnb and make money," said tenants' rights attorney Joseph Tobener. He's received more than 20 calls in the past 18 months from tenants who received eviction notices because of Airbnb.

Legitimate concerns

Some landlords have legitimate concerns, he said, including safety of other building residents, noise, overcrowding, the possibility that temporary guests could refuse to leave, and that San Francisco prohibits short-term rentals in buildings with four or more units.

Advocates for the so-called sharing economy say landlords and tenants could reach a happy medium through, well, sharing.

"Right now, landlords have zero incentive to like this kind of activity," said April Rinne, chief strategy officer at Collaborative Lab, which consults on shared use of resources like apartments and cars. "The renter is getting all the economic upside. A scenario in which that upside is shared could make it attractive for both parties."

Kelsey and Mike Sheofsky achieved that balance. The couple travel frequently for Shelter Co., their luxury-camping business. They had dabbled with the idea of listing their Mission District house on Airbnb. Then their landlord approached them.

"She said, 'What do you think about Airbnb-ing your place when you're gone?' " Kelsey Sheofsky said. "I thought, 'Perfect, we're ready to go.' Now we do it, and we give her a 20 percent cut of any money we make after cleaning expenses. Some months we give her an extra 600 bucks."