Short-term Rental Home Risks Rise With Popularity

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By Timothy Bolger ~ The surge of vacationers using increasingly popular online marketplaces to rent homes for short stays has brought with it a rising tide of cautionary tales for renters and homeowners in recent years.

From bait-and-switch scams to creepy hosts spying on renters with hidden cameras, the list of horrors guests have endured runs long. And while the ease with which homeowners on Fire Island and beyond can advertise their house on any number of short-term rental websites incentivizes those looking to make fast cash off of some renters, it also carries tax liabilities and the looming threat of new rules.

“Homesharing is here to stay in 2019, so let’s tax and regulate it in such a way that everyone can benefit and the industry is held accountable,” said New York State Senator James Skoufis (D-Hudson Valley), who proposed legislation that would impact such rentals statewide.

The debate comes amid a wave of similar legislation in municipalities across Long Island as well as cities and states nationwide as the hotel industry has ramped up its Share Better campaign, pushing back against short-term home rentals that compete with hotels and motels. The laws often cap the duration of short-term rentals, require owners to register their guests, and fine violators.

The villages of Saltaire and Ocean Beach each have strict codes regulating rentals that bar homeowners from renting their houses to groups of people who aren’t related to avoid loud group party houses.

Ocean Beach has long had a rule barring rentals of less than a week. In 2016, Saltaire also tightened its village code in response to Airbnb, capping home rentals to no less than two weeks and homeowners may not rent their houses more than five times annually.

Here’s what renters and hosts should know before vacation season returns:

RENTER BEWARE

Media accounts of renters finding hidden cameras that the host set up to spy on unsuspecting victims — often in bedrooms, bathrooms, and showers — aren’t only based on incidents that happen in far away places.

Jordan Taffet, who authorities have described as one of the most notorious rowdy group home renters in Ocean Beach, was arrested on July 18, 2009 and convicted a year later of second-degree unlawful surveillance: use/install imaging device for sexual arousal, a felony, court records show.

He was sentenced Oct. 29, 2010 to five years of probation, although he faced up to four years in prison. His appeal on that conviction was denied, records show.

TAX TROUBLE

Airbnb, which has an estimated 10% national market share for such rentals, made $42.1 million last year for 3,600 hosts in Suffolk County, who earned an average of $11,400 from 114,200 guests, but only about 1,000 of those hosts remitted the county’s 3% lodging tax,Long Island Business News reported.

For years, Suffolk County Comptroller John M. Kennedy Jr.’s auditors have been checking to ensure hotels, motels, bed and breakfasts and private homeowners that rent their homes for short periods are collecting the tax.

Like hotels and motels, homeowners are required to register with the county to be allowed to collect the tax. Registrants are required to file quarterly reports.

Sen. Skoufis’ state bill would shift responsibility for collecting taxes from the host to the platforms. It would also require short-term rentals to carry $250,000 in insurance, mandate that platforms offer a 24/7 hotline to address concerns from neighbors as a result of short-term rentals, and revoke bad hosts’ registrations after three rule violations.

“It’s time for elected officials to stand with our families and change New York’s laws so that responsible hosts can share our homes,” said Joy Williams, co-founder of the Home Sharing Association of America.

VERIFY EVERYTHING

Authorities warn that scammers have been known to trick renters into believing that the victim had legitimately booked it after the victims responded to an online ad and wired a payment to a crook that later vanished.

The FBI has been warning about this new take on the Nigerian scam for a decade. Typically, crooks advertise homes for rent at too-good-to-be-true rates on websites such as Craigslist without the actual homeowners’ knowledge or the victims able to get their money back.

“For the criminals it’s actually easy,” Ocean Beach Police Chief George Hesse said. “People don’t verify.”

Cases of victims finding themselves stranded in the village after realizing they’ve been duped are not uncommon. More than a dozen cases have been reported in Ocean Beach in recent years, authorities say.

Awareness is best defense. Hesse said to only deal with reputable local real estate brokers when renting homes. The FBI said to be suspicious if a landlord asks to only use a wire transfer service, beware of emails from “landlords” in broken English and be suspicious of rental rates significantly lower than the average for the area.

As the saying goes, “if it seems too good to be true, it probably is.”

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