One common question people have: is Airbnb legal? Is Airbnb safe? The website shot into fame within just a few years. The company is now worth billions of dollars and its network of guests and hosts have spread throughout the globe. So what makes their service so attractive? First of all, guests would be able to stay at a room in New York or Paris for half the price they would have paid if they stayed at a hotel. Since guests will be staying at a local neighborhood, they would also be able to have a “local experience” as opposed to the usual touristy fare. Hosts who have a spare room or who would like to rent out their vacation home find that Airbnb is a great way to make ends meet and get extra cash. So, for those unfamiliar with Airbnb the question is: Is Airbnb safe and reliable?
Yes or no? This is perhaps the first and most asked question by both guest and host alike. If you try to look for answers online, you will find mixed reviews since there are a small percentage of people who dislike Airbnb but who are all very load and vocal about their dislike on the internet. But look further. You will eventually realize that the majority of answers are a resounding yes, it is safe and reliable. But it’s not as simple matter. First we have to look at three things: the payment scheme, Airbnb’s safety measures, and some legal issues.
Airbnb’s payment scheme is quite reliable. Basically, Airbnb holds’ the guest’s credit card account (or whatever payment method is chosen) and only takes out the fee once the booking transaction is finalized. In case some problems arise from the host’s end or if the reservation is declined in some way, the charge is not completed. The payment is held until 24 hours right AFTER the appointed check-in time. This is done so that both host and guest will be able to inspect things and make sure everything is in order. Of course are some people who will still complain about this payment scheme but there aren’t many who do. Some will try to do cash payments which Airbnb does not endorse since it will be harder to maintain payment security that way. There are also guest refund policies and cancellation policies that serve to protect either host or guest.
The very nature of the sharing economy, where strangers let in strangers into their homes, is inevitably fraught with risk. There is no changing that. But Airbnb does its job to lower the risk involved by setting up the review system. All Airbnb users have a profile where past guests or hosts will be able to leave unerasable reviews. This will give you, as a host or a guest, insight on the past activities of the person on the other end. For example, a host who wants to make sure that he or she only get good, decent, guests will want to look religiously at the profiles of every guest who sends a reservation request. In addition to this, Airbnb also requires people to submit their valid ID’s as well as credit card accounts. This acts as a deterent for guests from violating their hosts room for example. Airbnb also has offers insurance to hosts for specific condition where a guest damage the rooms. Of course the host will have to provide proof such as pictures, etc.
This is where Airbnb encounters a gray area. The most famous account of legal problems with Airbnb is the case in New York where Airbnb user Nigel Warren, a tenant who listed his apartment an Airbnb guest, was fined $2,400. Apparently, the judge fined him because of their interpretation of a New York State law which disallows some rentals of apartments that is shorter than 30 days. Airbnb’s response to this is that they disappointed with the ruling and are still working with the city to make sure the law does not target New York home owners who just need to make ends meet and rents out their extra spae. Originally, the law was meant to target apartment owners from converting large complexes into illegal hotels without paying the right taxes. This means that there are legal matters that Airbnb still needs to address and hosts need to be extra careful. There are ways to make sure that you are not targeted by this law which we have written about here [link to article].
So there you have it. The sharing economy is new but judging from the amount of money Airbnb is worth, this industry is just starting to grow. The growing pains will still come. There might be future problems Airbnb will face. But for the most part, it’s users are very happy with the reliability of their service. Is Airbnb safe and legal: Yes.