Airbnb Lawsuit Claims Site Enables, Profits from Unauthorized Hosts Who Post Illegal Short-Term Rental Listings

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A new class action lawsuit alleges Airbnb is well aware that certain “hosts” for short-term residential rentals are unauthorized to rent property on a short-term basis yet “enables and facilitates” their illegal property rentals while collecting “handsome revenues.”

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The 30-page Airbnb lawsuit accuses the rental platform of failing to share the profits it reaps from the apparently illegal short-term listings, which are posted by individuals other than the landlords, with the actual owners of the real estate. The proposed class action says Airbnb’s apparently illegal host and listing practices violate contractual provisions that prohibit properties from being rented out on a short-term basis, and/or violate Nevada and local laws governing short-term rentals in the state.

“Airbnb routinely fails to comply with the requirements of local Nevada law,” the real estate lawsuit charges.

The complaint claims that although Airbnb assures that “all personal profiles and listings are verified,” the platform is nevertheless aware that hosts are sometimes individuals who are not the properties’ owners and are unauthorized to rent the homes on a short-term basis. Per the case, a person may not be permitted to list a short-term rental on Airbnb if the property at issue is subject to a lease that prohibits subletting and/or short-term rentals.

For context, the lawsuit adds that Airbnb, in its “Host Terms” document in a section titled “Know Your Legal Obligations,” emphasizes that some landlords and leases, or homeowner or condo association rules, restrict or prohibit short-term rentals, and that some cities have zoning or other laws that restrict short-term rentals.

“State and local laws also require Airbnb to investigate its potential Hosts to ensure they are authorized to rent out property on a short-term basis,” the suit mentions, noting that the Las Vegas Municipal Code, for instance, mandates that Airbnb include a city business license number within every short-term rental listing in the city. 

Per the case, a host who wants to conduct a short-term rental of a property that is subject to a lease or contract that prohibits subleasing or short-term rental of the property is ineligible for a license to rent out that property on a short-term basis in Las Vegas.

Despite the foregoing, Airbnb “enables and facilitates” certain unauthorized hosts to post illegal listings on its platform and facilitates the short-term rental of properties “in defiance of legal and/or contractual prohibitions” on such, the lawsuit alleges.

As the suit tells it, Airbnb “collects handsome revenues from these illegal and improper activities” in the form of hefty fees charged to the hosts and, in most cases, the guests.

Overall, the revenue Airbnb collects from listings of properties that contractually may not be subleased or rented out on a short-term basis belongs neither to the company nor the host, the suit contends.

“Indeed, in these circumstances, Airbnb is obtaining revenue from the short-term rental of property that the owner has expressly prohibited from being subleased or used for short-term rental purposes. Similarly, when Airbnb obtains revenue from the Listing of a landlord’s property by someone other than the landlord when the Listing and/or short-term rental violates Nevada and local law, Airbnb is obtaining revenue from conduct that is illegal and from the use of property that belongs neither to it nor to the Airbnb Host. In both of these circumstances, Airbnb is unjustly enriching itself by using the owner’s property, with no compensation to the owner.”

The plaintiff has owned a single-family home in Las Vegas since 2020 and listed the property for rent in June 2021, the suit says. Per the case, the plaintiff sought to rent out her house on a long-term basis of no less than a one-year period.

According to the lawsuit, the plaintiff was contacted by a woman who wanted to rent the home out for her mother, and the individual’s mother allegedly signed a lease that included prohibitions on sub-leasing and short-term rentals.

The lease was renewed in June 2022 and again in May 2023, though this time the woman whose mother occupied the home requested to be added as a tenant/occupant, the suit states.

The plaintiff alleges that in November 2023, she went to the home to do routine landscaping and observed “four strangers entering and leaving the house freely via the use of the security punch code on the front door.” These events “seemed suspicious” to the plaintiff, who then searched Airbnb and found her own home posted as available for a short-term rental, with the current renter identified as a “Superhost,” the lawsuit claims.

Though the plaintiff contacted Airbnb, the platform “refused to take any action” with respect to the renter posting the plaintiff’s home for short-term rentals on the website, the case relays.

The complaint summarizes that Airbnb, without the plaintiff's knowledge or consent, used her home to carry out short-term rentals, obtaining revenue in the process without sharing any of the money with the plaintiff.

The Airbnb class action lawsuit looks to cover all individuals in Nevada who currently own or previously owned property that was rented out on a short-term basis by an Airbnb host, when the host was prohibited from renting out the property on a short-term basis, at any time from June 10, 2020 to the present.

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