Airbnb and Major Landlord Settle Lawsuit Over Subletting Violations

Airbnb and a landlord that owns several large apartment complexes in Miami and other markets settled a lawsuit in which the plaintiff argued that tenants were violating their leases and creating harmful conditions by acting as hosts and renting their apartments to Airbnb customers.

In a joint statement Tuesday, Apartment Investment and Management Co. (Aimco), which owns the Bay Parc Apartments, Flamingo North Tower and Flamingo Center Tower apartment complexes in Miami, indicated that they have settled all of their disputes and the litigation between them has been dismissed. Plaintiff Aimco and defendant Airbnb said they believe the settlement is mutually beneficial.

While focused on Miami, the ruling any ruling would have directed how companies like Aimco pursued Airbnb in other destinations. The Denver-based Aimco operates in 22 markets and has 250,000 units on the market.

“Aimco believes that the parties’ agreement provides Aimco with the ability to controlshort-term rental activity consistent with its contract and property rights,” the joint statement said. “As part of the settlement, Aimco and Airbnb have agreed to meet to discuss opportunities in the multifamily housing industry.”

An Airbnb spokesperson declined to comment further.

From outward appearances, it seems as though the landlord won assurances that tenants won’t rent out their apartments on Airbnb, while Airbnb can say that it has at least opened a dialogue with Aimco, based in Denver, about potential cooperation in a rental program. Airbnb is starting to work with large landlords in several cities.

It’s unclear if or how much Airbnb, headquartered in San Francisco, paid in damages to the landlord.

The plaintiffs sought monetary relief from Airbnb and argued that its hosts’ activities and their customers were creating noise and causing damages in these luxury apartment complexes, forcing the landlord to increase their security costs and outlays to appease stressed-out tenants.

In its defense in state court in Miami-Dade County, Florida, Airbnb had argued initially that the Communications Decency Act, which generally shields websites offering third-party content from liability on First Amendment grounds, should cause the case to be dismissed. But a a circuit court judge in July ruled that such protections were not absolute so the lawsuit, which was filed in February 2017, could proceed.

Airbnb also argued that its terms and conditions put the onus on hosts to abide by their apartment leases.

The settlement cleans up a nasty irritant for Airbnb on its road toward an initial public offering in 2019.