Rooms Rentals & Shares

What the Airbnb Squatter Says About the Sharing Economy

Jul 27, 2014 8:01 am

Skift Take

The systems put in place by sharing economy companies work the vast majority of the time, but when they don’t the participants don’t always have the tools they need to fix the problems that arise.

— Jason Clampet

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Airbnb listings in Palm Springs, California.


It’s a modern-day horror story that has grabbed international attention since The Chronicle reported it last week. A man used Airbnb to rent a Palm Springs vacation condo, stopped paying, refused to leave and threatened to sue the owner.

The “Airbnb squatter” case’s connection to the emerging sharing economy struck a nerve, said condo owner Cory Tschogl.

“I think the story also may play on people’s fears, concepts of ownership, property rights, tenants’ rights in California, personal ethics and the list goes on,” she said.

Now this sharing economy saga has another chapter: The man and his brother — whom Tschogl identified as her “Airbnb squatters” — raised some $40,000 on crowdfunding platform Kickstarter for a video game that never materialized, leaving scores of angry donors in their wake.

The Airbnb and Kickstarter situations underscore the tenuous nature of safeguards in emerging peer-to-peer markets, in which people trust Internet strangers based on reviews by other Internet strangers.

Maksym Pashanin and Denys Pashanin are the principals behind Kilobite Inc., which took to Kickstarter in November to promise a June delivery of a zombie game called “Confederate Express,” but has produced only a demo.

Instead, Kilobite recently launched a new Kickstarter campaign, seeking $25,000 for another game called “Knuckle Club.” Maksym Pashanin apologized to increasingly irate backers in Kickstarter comments. “We are working tirelessly every single day to make the deadlines,” he wrote.

Outraged Kickstarter backers are saying they were duped and want their money back — but they’re probably out of luck. Kickstarter offers no guarantees that the creative projects funded on the site will come to fruition.

Maksym Pashanin and Kilobite did not respond to e-mail requests for comment, and his cell number does not accept messages.

Meanwhile, Tschogl, a San Francisco rehabilitation therapist for blind and low-vision people, is facing thousands of dollars in legal expenses and an eviction process of up to six months.

“It’s wait and see at this point,” Tschogl said in an e-mail Friday. “These guys are pros and know how to hide out.”

Tenants’ Protection

The brothers, who rented the one-bedroom unit in late May for 44 days but paid for just a month, gained tenants’ protections under California law after occupying the unit for 30 days.

Maksym Pashanin sent Tschogl texts threatening to press charges against her for blackmail, negligence and malicious misconduct, including his claims that the tap water hurt his expensive espresso machine and exacerbated his brother’s ulcer, she said, providing copies of the messages.

Tschogl told The Chronicle that the brothers are the renters and provided a copy of Maksym’s Airbnb “verified ID” profile, in which he appears identical to the Maksym Pashanin shown in a YouTube video promoting the Kilobite game. The Airbnb profile describes him as a video game animator from Austin, Texas.

A process server was unable to deliver an eviction notice to him because the man who answered the condo door — clothed in a hoodie and scarf — said he was Maksym’s brother, said Tschogl.

Public records show that Kilobite Inc. was incorporated in Navarre, Fla., last Aug. 13, with Maksym and Denys Pashanin as principals. The company was incorporated in Austin on Dec. 11, with Denys listed as its registered agent and Maksym as director.

Legal experts said the brothers’ evident knack for exploiting loopholes at Airbnb and Kickstarter reflects the Wild West nature of new marketplaces.

“Like any nascent market, the sharing economy is going to generate a flurry of new laws from regulators as well as through civil litigation,” said Charley Moore, CEO of San Francisco’s Rocket Lawyer. “Businesses like Airbnb, Uber and Kickstarter fall between the gaps of regulations and push the envelope on what is allowed.”

Seen as Donations

For instance, Kickstarter funds are donations, and thus lack the legal protections accorded to investments, he said.

“Backers have trouble saying they were defrauded; they weren’t expecting anything other than psychic rewards” and some minor “rewards” such as naming a character.

The legal climate is similarly unsettled for Airbnb.

“This is a gray area where laws haven’t caught up to Airbnb,” said Ontario (San Bernardino County) attorney C. Mario Jaramillo of Access Law Group. “Being a homeowner is very different from being an innkeeper. (A landlord) cannot circumvent unlawful detainer and eviction laws in California. But laws protect traditional hoteliers and innkeepers; if people don’t pay, they can call the police and have them kicked out for trespassing.”

Airbnb, which initially lagged in responding to Tschogl’s requests for assistance, has now taken a second look at her situation and the entire subject of long-term guests.

“Officials from our team have contacted this host and she has been paid the full cost of the reservation, and we’re working with her to provide additional legal support as we move forward,” said Airbnb spokesman Nick Papas, who did not specify whether the payment is for just the 44-day reservation or the continuing stay. “We’re also reviewing our procedures and making changes to our platform to give hosts more information about long-term reservations.”

Kickstarter Policy

At Kickstarter, spokesman Justin Kazmark said its “Trust & Safety” pages outline how it protects the system’s long-term integrity, but did not respond to requests for comments on whether the 2,386 people who put up $39,739 for “Confederate Express” could get any money back for a game that doesn’t exist.

“Kickstarter doesn’t evaluate a project’s claims, resolve disputes, or offer refunds — backers decide what’s worth funding and what’s not,” the guidelines say.

Tschogl, who has found the whole case “extremely stressful” and is bemused by the media attention, has some advice for other Airbnb hosts.

“Do your own formal background check and credit check in multiple states if necessary to ensure a potential guest is not a vexatious litigant,” she said.

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