One of the least discussed, yet most commonly illegal tenant activities that property managers face is the growing trend of short-term rentals. Platforms like Airbnb and Booking.com are widely used by tenants who bypass lease agreements, creating headaches for property managers and landlords. Recently, in a property I began managing, I discovered that out of 32 units, 20 were being illegally used for short-term rentals. Despite clear lease terms prohibiting such activity, tenants chose to ignore these rules, while short-term rental platforms operate without verifying tenants’ lease agreements.
Imagine if Uber hired drivers without checking their licenses. That’s essentially what these sites are doing by allowing hosts to list units without verifying lease agreements or ownership. Even after receiving multiple complaints and turning away unauthorized guests, these determined tenants persist in their illegal activities.
There’s no shortage of online resources—podcasts, YouTube videos, and even live courses—teaching individuals how to profit from these deceptive tactics. Unfortunately, property management’s response to this issue has been weak at best. Regular contact with Santa Monica’s Code Enforcement often results in minimal action: a fine posted on a frequently used unit, but little to no enforcement. While Santa Monica does prohibit short-term rentals, the lack of a clear enforcement process allows these activities to continue unchecked. Despite requiring permits for short-term rentals, there is no real effort to ensure compliance.
One of the most concerning aspects of these short-term rental schemes is the use of fictitious names. For example, “Mike” is listed as the host for multiple units, yet no one by that name lives in the building. These tenants lease apartments under false names, offering a monthly cut in exchange for running illegal rentals. This fraud is not only financially damaging but also puts the safety and security of tenants and guests at risk.
In some cases, I’ve encountered individuals who live abroad and operate these unauthorized rentals remotely. They direct guests to lockboxes located in alleys or on the streets to pick up keys, a practice that should raise immediate red flags for platforms like Airbnb and Booking.com. This not only facilitates financial fraud but also creates potential security hazards. Recently, a guest attempted to break into one of these units, damaging the door and frame. The tenant inside was terrified, further highlighting the danger of such practices.
In the short term, I believe property management companies, apartment associations, and hotel associations need to unite in combating this issue. Unauthorized short-term rentals harm not only property owners and managers but also the hotel industry, which faces unfair competition. In the long run, we must push for stricter regulations that require short-term rental platforms to thoroughly review the leases of every host and ensure they have the necessary permits before allowing them to list a property.
It’s time to take a stand against these unscrupulous practices and protect the integrity of our properties, the safety of our tenants, and the long-term viability of our industry.
