REAL ESTATE LAW

In this section, we are going to talk about an extremely important topic that pertains to real estate and short-term rentals if you have an Airbnb or a VRBO. If you have any vacation rental at all, or if you're thinking of getting into short-term rentals. If you're a landlord with long-term tenants and you're going to move those properties into the short-term rental market you need to understand this entire section. We are going to cover many important topics including: possession, how that possession is defined for non-leased persons, non-tenants people who stay for only a few days at a time, and then there's other definitions that you need to know that surround the argument of possession. We're going to use Airbnb specifically and their terms of service so that way you can learn how to apply the definitions of possession. 

I’m also going to teach you how to extract money back out of Airbnb that they've wrongfully taken from you if you are on that side of the fence. I dug into this topic because I have over 100 properties on Airbnb and every week they take thousands of dollars from me that they should not take from me because I was not able to argue possession the proper way. I was not able to argue possession in a way that the people who do resolutions at Airbnb could understand it in their terms of service. You're going to learn from my mistaken and able to understand possession, your legal arguments of possession and you're going to be able to boil itdown into a basic format that you can tell Airbnb. You will identify the details of what the terms of service say, what they legally means, and why AirBnb might owe you a lot of money. Section one is definitions and section two is how to go to war and this section is going to be the most important information on this topic if you're an Airbnb operator.  

Two weeks ago Airbnb took $3,100 from me and if I would have known my legal arguments of possession I would have been able to explain to the resolution person how legally a guest had still had possession of my home even though they claimed it did not stay. Airbnb's calendar was blocked for like the whole month I would have been able to get my $3,100 and now that I’m armed with this stuff after losing tons of money andit being the last straw I can take them to arbitration and argue that they owe me all of this money for pretty much every single reservation that they ruled against me in the same fashion. I can go back in I’m going to gopull between 20 and 100 thousand dollars back from Airbnb in arbitration because I now legally am armed to.I’m going to give this same thing to you because it's about you getting paid what you are owed. Even if you don't think you're owed any money at this moment in time if you're in short-term rentals knowing possessionand the arguments of possession will help you kick people out when they don't pay, help you prevent people from becoming tenants if they're going to try to squat on you. If you're not aware of this stuff you may not even know that Airbnb is taking money from you that you're actually owed because you just don't know the legal terms and the legal arguments here. This is absolutely going to save you a ton of money in losses because even though Airbnb makes like final decisions on who gets to keep money when it comes toresolutions, there are legal enforceable arguments here that you can use.

Let's talk about the legal definition of possession so possession. By legal definition is to have ownership or control of something. There are different ways to explain ownership and control. I bought this coffee so I’m inpossession of this coffee but in a football game whoever is like whoever has the quarterback out on the fieldhas possession of the ball and they can accidentally turn over possession at any time. They have control of the ball during the game but I think the NFL actually owns the football so ultimately within terms of an agreement control is just as powerful as ownership until someone with a better argument of possession can come along and try to take that position. This concept in real estate is like the owner the landlord owns a property owns a building and then they lease to a tenant. That tenant then has control.

A lot of really rich people have a strategy where they won't actually own anything. They'll have their entire estate in a trust that they don't own any part of the trust. This means if you try to sue that person you cannotactually get their money because it's locked away in a trust that they don't own. Then they're written in as theperson with sole control over the trust which means they can do whatever they want with this stuff they can buy and sell and move cash around within the trust as if it's their money. But they don't technically own itanymore. Knowin that you don't possess something through ownership but can control it is a super powerful variable here too and I encourage you to research how the rich actually own nothing. It's a pretty compelling topic. Here in this case you can have multiple layers of possession.

In my world I do rental arbitrage. A landlord owns a building doesn't even really own it half the time because he's got a mortgage that he has to pay so the bank owns the building. Then he's got a loan as he's paying offso he can have sole ownership that building once the bank lien is gone and then he leases it to me as a long-term tenant. Now I have control within my lease agreement and then I will give control to people who rent it onAirbnb by the night or by the week. There are people who have escalating levels of possession like escalating rights as well. A person when they book your Airbnb has control of your property. If they book a month from right now it's november so let's say they book over like christmas week through new year's your calendar onAirbnb gets blocked that guest who's paid earnest money to Airbnb for that reservation now has control ofyour property for those dates so even though they're not at your property yet. Regarding those dates you they have control. Here's why.

If you go to section 5.2 of your terms of service under hosting, it says contracting with guests. It says that when a host who provides a host service has it like an ongoing contract with a guest they are obligated to provide their host services. Let's back out and teach you the definitions within this so you can make it all make sense. Airbnb considers two users on the platform who are in their community their members there is a person who is going to buy a service that is a guest. There's a person who provides a service now it may be an accommodation or maybe an experience but all the persons who are service providers on Airbnb are hosts. Whatever service you provide is a group of things they call host services. You are providing a house or an apartment or a room that is considered an accommodation. The legal definition of an accommodation is a room or a series of rooms in which to stay in, so you providing a room or series of rooms to stay in. An entire home for example, counts as an accommodation. That location, that specific address is your host service soAirbnb's terms of service here state that when a guest has an active contract with you for that location that you are legally required in the terms of service to provide that like literal location that accommodation. That'syour host service. That means that they have control.

With hotels it's slightly different. A guest can book a hotel online but they haven't paid money yet. Usually until they check in. Unless they get a really big discount like priceline and then there's no refunds because priceline takes the money but the guest still doesn't have control of the property of the hotel until they check.They're not actually assigned a specific hotel room number. If you have stayed in a hotel, you know this is true. You show up at a hotel and then they tell you you’re room number and that's when you have possessionand control of the hotel room for the period of time in which you're staying. Hotels have the right to shut down your key after your length of time is over you don't have legal right or possession of a property when yourcontract date has ended. At 11 am the day of checkout if you are still there they can just kick you out. They'reallowed to remove you and different states within the united states have different laws on removing people.

What we've covered now is that possession does not mean you have to own something, you can just control it. Controlling something can be future tense and it can be present tense. An accommodation is something that you offer as an Airbnb host and that is your literal property by definition. Airbnb's terms of service require you to provide that when a guest has an active contract. Airbnb's terms of service says it's a direct contract with the guest, you're required to provide the service, and Airbnb enforces that.

Let’s talk about the guest terms of service, how it applies to their use and possession and if they want a refund for example, what they have to do to get a refund. Guests also have terms of service that they agree to as well. There's one main section I want to talk to you about which is the guest refund policy. If you go through the refund policy you'll see what qualifies for a refund like extenuating circumstances stuff like that but they talk about something called a travel issue. A travel issue is the liability where a host doesn't dosomething right. The home might actually not be available, the photos don't look like they should, the photos don't represent the property. There's actually a real danger to the guest cleanliness issues stuff like that, and this is where a majority of refunds come from. A guest will show up and claim something and then that guest will get a refund. The refund policy says that there is a travel issue and a guest wants a full refund they need to show photos within 24 hours. They have to show photos within 24 hours and they have to agree to vacate the premise. Here is where we need to know more definitions vacate and premise are the two key words here:they have to agree to vacate the premise.

We've already discussed what an accommodation is. It's the property. and vacate by definition in regards toproperty because we're talking about an accommodation here. Vacate by definition for real property is to return possession and we already talked about this earlier that possession includes control. If a guest wants a refund for a travel issue they currently have possession of your property future or present. When they have an active reservation and we now know that if a guest holds their reservation on Airbnb's calendar and blocks your calendar that they have control of the property. If they do not agree to vacate and return possession of and return control of your accommodation they do not qualify for a full refund, so your legal argument here is that the Airbnb guest if they want a full refund they have to cancel the reservation and return control of the property. Airbnb's terms of service for hosts also say that an accommodation is an address and it is represented by one listing you cannot make multiple listings for the same accommodation. This means you cannot market the same property twice if you get one person booking your property you cannot continue to market to find a second person to book your property just in case there's an issue. Airbnb enforces controlwhen one guest has possession. Your legal argument here to Airbnb if you ever end up in a situation like I’vebeen in multiple times if a guest says I’m not happy with this and you try to of course solve the problem but they don’t want to stay, you're going to have to walk them through this.

According to the terms of service for hosts and the terms of service for guests, you need to explain to them what they have to do. You should send them a message:

“Ma’am or sir, I understand you want a refund. We do have a refund policy that Airbnb may override. You'regoing to need to involve Airbnb, and they will mediate a refund if they agree with you. They will give you a refund above and beyond our own refund policy. In order to qualify for a refund, you've signed Airbnb's terms of service and they state that you must agree to vacate the accommodation. Legal definition of vacate means to return possession of the property and possession includes control. While you have an active reservation with us you are in control of our property we are legally bound by Airbnb's terms of service to provide you this home regardless of what you're saying to us right now. If you have a contract with us we have to provide you the home. If you do not cancel your reservation you are legally declaring that you intend to maintain possession of our home which will now nullify any claims for refund in the future. If you want to discuss arefund with Airbnb you are more than welcome to but, in order to qualify you need to cancel your reservation.”

We've done this and it works. When guests tell you they want money back will try to hold your property hostage. They'll tell you there's something wrong with the listing. Airbnb hosts used to be able to go in and immediately fix these things. There is something that you can do here and this is the argument that I’mmaking with Airbnb now. You can go in and immediately fix the problems that the guest has brought to your attention.  You can show Airbnb proof that you've fixed them. Then, if the Airbnb guest tries to hold your property hostage and does not vacate the premise legally by definition control included. If they keep theirreservation you can show Airbnb that yes, the guest uploaded photos that there was an issue, there was a travel issue at that moment in time that that's their claim. But we just showed you photo documentation that within three hours or within 12 hours or within 24 hours that we were able to remediate any travel issues.We're not going to actually state that the travel issue was valid or not but we can we showed you proof thatthere was no travel issue within 24 hours of their claim. Now the guests never canceled their reservation, they never returned possession of the property.

Since they maintained possession of the property your Airbnb terms of service state that a guest can get a refund of up to 50 % of any night that they experienced a travel issue. They only experienced a travel issue for the hours between the time that they uploaded photos and the time that we uploaded our proof that thetravel issue was remediated. Without getting into a big discussion about whether or not the travel issue wasvalid, we have proof that the guests maintained possession of our property and we have proof that there were no travel issues after you know two days of the reservation. I am willing to give this guest a 50 refund for the first two nights of their stay but they maintain possession of my home for the other 20 nights and thus they are not entitled to a refund for the other 20 nights. Even if the guest says that they did not stay they still maintained possession and control of my property. This is what we are presenting to Airbnb when a guest says that they didn't stay for like a three week long stay because they wanted to be unreasonable and they wanted to force us to give them a full refund.

This will happen sometimes when a guest stays for a few days and then they want a full refund. They won'tcancel the reservation because they're trying to hold your property hostage to get you to refund them thedays that they've already used.