The Covid-19 Pandemic brought an increase in demand for short-term rentals of luxury homes for those looking for nicer living- and workspaces to lay low or escape during lockdowns. As prices soared for these short-term rentals, so did the fraud. While the pandemic and governmental restrictions have largely subsided, the increased rental pricing and fraud seem still pervasive.
These short-term rental scams manifest in two distinct ways:
First, scammers often advertise rentals that either don’t exist or are not available to trick unsuspecting renters into sending money before they find out the truth. [See FTC Article at https://consumer.ftc.gov/articles/rental-listing-scams.] The end result is the would-be renter paid money for a space they are unable to use for their vacation or otherwise, which can be disappointing to say the least.
Second, and the more severe of the two, perpetrators pose as tenants and enter into long-term lease agreements with owners of high-end homes. These same perpetrators then advertise these properties as available for short-term rental via online platforms (Craigslist, Airbnb, VRBO, and so forth) without the owners’ knowledge or consent, often for several times the amount that the lease requires in rent. The result is a high-yielding return for these unscrupulous “tenants” who benefit from the unwary landlords they were renting from. No mind that this activity is a clear violation of the anti-assignment and subletting clauses found in all CAR form residential lease agreements and most other standard leases found throughout California. But what happens when a landlord gets wise and begins to question who actually has been living in their rental property?
One such case we handled is case and point. Our client owned a beautiful beachfront home as an investment property. Naturally, the owner (our client) entered into a term lease agreement with a tenant during the height of the pandemic, who proclaimed he was looking to escape the city life for a while. But that turned out to be a lie. Instead of making the home his own, the tenant then proceeded to list the property for short-term rental and indeed did rent the property (probably several times over). But somewhere along the way the tenant stopped making rent payments, and at that point the owner began to question what truly was going on.
Eventually, the owner learned that someone other than who he rented to was living in his home. Making matters worse, this was also the point in time when the state and local protections favoring tenants were at their strongest and the courts were virtually closed to most unlawful detainer and eviction proceedings. After an approximate two-year long legal battle, including eviction proceedings and a subsequent action brought by our firm against the perpetrators, the property was restored and the owner was able to recoup back rent and other losses attributed to the unfortunate event.
Unfortunately, this is not an isolated incident. Landlords and their agents, including those who rent properties in areas that are subject to increase demand during certain times of the year, would be well served by running periodic searches of their homes through online platforms that offer short-term rentals. Lest they risk having their investment properties being taken over by people with whom they have no privity.
We help people like you fight back against listing scams and other real estate torts. Contact us today for the legal assistance you need.