What You Need to Know About Short-Term Rental Liability

Thanks to online hosting platforms like Airbnb or Austin-based HomeAway, Short-Term Rentals (STRs) have become a hot topic throughout Texas in the past several years, popping up repeatedly in local city ordinances and in Texas state legislature.  Never has there been such widespread ease of access that encourages homeowners to list their residence for a short period of time (less than 30 days). This, in turn, has spiked the proportion of short-term rentals in any given neighborhood to record numbers, especially in cities that draw large tourist crowds.  In fact, many coastal areas of Texas experience STR booms starting in March at Spring Break throughout the summer season. 
Given that a fair percentage of your coastal community may be housing short-term renters, it pays to know precisely what your homeowners association (HOA) or residents may be responsible for when it comes to renter injuries and property damages.

WHO IS RESPONSIBLE FOR RENTER INJURIES?

Ultimately, most of the thousands of short-term rentals each week are uneventful. However, accidents can and do happen. If a renter files a lawsuit against your association, claiming that negligence occurred in failure to keep a stairway properly lit, or a pool maintained, the legal costs can multiple exponentially.   Who is responsible for paying?   XXXX - Chris Hill Opinion/Quote
 

DOES YOUR HOSTING PLATFORM PROVIDE INSURANCE?

Some short-term hosting platforms do provide liability insurance.  According to Airbnb's Host Protection Insurance program, their policy provides primary liability coverage for up to $1 million per occurrence in the event of third party claims of bodily injury or property damage. This coverage is subject to a $1 million cap per listing location.  Specifically, the policy states “The Host Protection Insurance program covers landlords and homeowners associations in many cases when claims are brought against them because a guest suffers injury during a stay.”  Such coverage would include claims filed by a landlord (i.e., Homeowners Association) against a host who has rented out his or her unit.  In contrast, HomeAway doesn’t provide liability insurance to hosts, instead recommending that hosts obtain their own short-term rental coverage.
 

WHO PAYS FOR PROPERTY DAMAGES CAUSED BY SHORT-TERM RENTERS?

Usually, if a guest damages a homeowner’s personal property or home, the loss is covered by the homeowner’s policy or renter’s insurance and will be reimbursed by the insurer.  This kind of coverage typically occurs when personal possessions are destroyed or stolen, as well as liability protection if someone is hurt in the dwelling. However, many of these policies only cover tenants who occasionally have visitors – not tenants who are engaged in the business of renting out their homes to paying guests.  

But what happens when a guest damages property outside the dwelling that belongs in common to the homeowners’ association? 
XXXXXXX - Chris Hill Opinion/Quote