The latest travel trends are being built around the business model developed and capitalized upon by AirBnB. This business model allows ordinary home and condo owners to host guests for short-term rentals. The theoretical benefit of the AirBnB service is that travelers may obtain premium accommodations that few hotels can compete with, at a range of prices for every purse. Travelers may also receive inside information on where to go and what to do from courteous hosts.
From a consumer’s standpoint, the greater the supply of short-term rentals, the more competition exists in the free market to provide quality services. Unfortunately, houses that adopt this AirBnB model may have unpredictable coverage in the event of an accident. Unlike commercial lodging houses, these AirBnB-style rentals are not required to comply with the same laws of commercial insurance coverage and regulations written for hotel chains. They may even be in violation of the Ontario Residential Tenancies Act for charging rental fees that accumulatively exceed what they themselves pay. They may be in violation of other local ordinances, their homeowner or rental insurance policies, or otherwise be in violation of their own lease or mortgage terms and conditions. If a temporary tenant should hurt themselves and enlist the help of a workers compensation lawyer with considerable experience in matters of slip and fall and property law, the hosts could find themselves in some pretty hot soup.
It is important that hosts renting out their property with an AirBnB-style platform indemnify themselves from all negligence by requiring additional indemnification contracts. In these contracts, the occupant would have to “willingly assume risks” that they may be injured as an express exception to the Occupiers Liability Act. There are many benefits to contracting your services in this manner including the probability that your homeowner insurance policy rates will not go up from hosting.
Personal injury is a huge liability to short-term rental hosts. The liability attached to hosts under the Occupiers’ Liability Act may apply to activity on the property or dangers inherent to the property itself. For hosts, the threat of legal action after an unforeseeable accident may cost them tens of thousands in litigation fees, even if they ultimately prevail; they would have to show that the claims against them were malicious in order to recover any representation fees at that point.
The failures to hedge against personal injury lawsuits is a costly mistake that many have made. Whether, a party gets out of control leading to a fire, or drunk tourists injure themselves diving off the shed into the pool. The facts of what happened are always unclear after the incident has occurred and one-sided statements from a group of friends that your negligence in maintaining the property was the sole proximate cause could put the medical bills and damages on your shoulders. In this way, it can easily be seen that while peer to peer markets are extremely appealing on the surface, if due diligence is not followed there can be extremely problematic repercussion. Stay safe, and consult an expert in law before you become liable in any manner.