Condo boards slap hefty fines on neighbors for Airbnb rentals

Kyle Piers started renting his one-bedroom condo in 2012, first to raise money for his wedding. He charged $200 to $300 a night.
Kyle Piers started renting his one-bedroom condo in 2012, first to raise money for his wedding. He charged $200 to $300 a night.

Kyle Piers earned rave reviews as a host on the vacation rental website Airbnb.

He has scouted gym memberships for guests, provided detailed instructions for using public transit, and even tracked down a local supplier of beet juice for a Netherlands couple staying at his Back Bay condominium during the Boston Marathon.

“Fantastic,” “awesome,” and “welcoming” are some of the words of praise guests posted on Piers’s Airbnb page.

But neighbors at his 31-unit condo complex on Massachusetts Avenue were less than thrilled. Upset at the traffic trooping into the building near Symphony Hall, the condo association earlier this year slapped Piers with a $9,700 fine for violating the building’s rules against short-term rentals by running a hotel out of his home.

“It was a rude awakening,” said Piers, a 27-year-old research scientist who has hired a lawyer to negotiate a lower fine. “I didn’t expect, as an owner, having somebody else in my own home would be a problem.”

Piers and some other condo owners in Massachusetts who have made a second career of renting their homes on Airbnb, HomeAway, and its subsidiary, VRBO, are getting an unwelcome reception from their neighbors. Condo associations are scrambling to update their rules to clarify when owners can sublet units, in many cases expressly forbidding the kind of short-term rentals found on Airbnb and even house swaps, where money isn’t exchanged.

“It’s one of the issues that condominium boards are trying to get their hands around,” said Mark Einhorn, an attorney for Braintree-based Marcus, Errico, Emmer & Brooks, P.C., a law firm that represents 4,000 condo associations throughout New England. “It seems to hit at the heart of being in a condominium setting. It’s the idea of a constant revolving door right next door.”

The rise of these rentals has turned some neighbors into snoops, conducting checks on vacation websites to determine if that rental in their neighborhood with the sunny bedrooms and spotless bathrooms is in fact in their building.

For some, the rental business in their building is hard to miss. At one Boston property, neighbors got wind of a unit being used as a vacation rental when 40 people from a local convention wandered into the lobby, invited by the renter to a meeting there, said Stephen Vigneau, who oversees the building for property manager Modica Associates.

Companies such as Airbnb are darlings of the so-called sharing economy, where people make money renting out their homes, cars, even their own time, using software designed by a new generation of technology entrepreneurs. Like its cousin, Uber Technologies Inc., Airbnb has assumed a staggering importance in the tech hierarchy: The company is said to be worth $25 billion, based on a recent venture capital investment.

These home rental services allow people to list their homes for rent and connect with tourists who are looking for a place to stay. Payments between the renter and host are completed online, with the sites charging a fee of between a 6 and 12 percent; the host keeps the rest, which can add up to thousands of dollars in income a year.

In the Boston area, Airbnb offered more than 1,000 options this past week, ranging from less than $100 a night for a private room in a brownstone to $350 for a condo in the Back Bay. HomeAway listed 352 rentals in Boston. VRBO had 54 rentals.

For some property managers, though, all those potential bookings are nothing but trouble.

“Everybody thinks it’s the best thing in the world, but to me it’s a headache,” said Vig­neau, who usually gets the complaints, has to track down which of the building’s many units the guests are staying in, and then notify the condo owner of the violation.

San Francisco-based Airbnb did not return requests for comment.

The cost of getting caught can be steep. Some condo associations have fined owners anywhere from $100 to $1,000, depending on their bylaws, for each night they rent out their units.

Last year, Bilal Zuberi, a former executive with a Boston venture capital firm, was initially fined $500 a night after a tenant who was renting his Cambridge condo put the place up on Airbnb. Facing a $9,500 fine, Zuberi took to Twitter to grumble, and after pleading with his condo association got the fine reduced to $1,000 — which his tenant paid.

As the popularity of these sites has grown, so has the number of clashes with traditional rules. Hotels and inns have objected, arguing that the homes listed on these sites are circumventing health and tax laws, leaving traditional hostelries at a disadvantage. Many cities are trying to determine what rules such rentals must follow and how to regulate them — whether they should be licensed as a bed and breakfast, for example.

The Inspectional Services Department in Boston has decided to temporarily not issue citations to homeowners renting through Airbnb and similar services, while officials consider new regulations.

In condo buildings where neighbors share hallways and rooftop gardens, the appearance of unfamiliar faces can cause friction and raise safety concerns. Another risk: Mortgage lenders may charge higher rates for home equity and other loans to condo buildings with a lot of rentals, because of concerns about higher upkeep costs and lower property values.

But Carl Shepherd, cofounder of Texas-based HomeAway, said condo owners who list their homes on his site agree to abide by local rules and ordinances, including those of their condo association. He said HomeAway guests are usually good neighbors and help boost the local economy.

In Piers’s case, he started renting his one-bedroom condo in 2012, first to raise money for his wedding. He charged $200 to $300 a night, sometimes staying there with his guests, usually not. He declined to say how much money he made over the two-year period.

Eventually neighbors in the building, where one-bedroom units have sold for more than $600,000, couldn’t ignore the strangers in the hallway. In December 2014, after being notified his condo association was going to prohibit Airbnb hosting, Piers removed his listing from the site.

Even so, the trustees of his condo association said Piers had violated their rules and hit him with a hefty fine.

Piers wishes that instead of banning the practice, his and other condo associations would allow owners to list properties under certain conditions, such as limiting the number of days a home could be rented out.

“It’s not going to go away,” Piers said. “It definitely has its place.”