PEOPLE who are considering entering the short-term rental market are being cautioned to explore the liabilities associated with operating such establishments in the absence of specific regulations and guidelines.

The warning came out of a realtor’s symposium organised by the Realtors Association of Jamaica (RAJ), in partnership with JN Bank. The symposium, held at the Spanish Court Hotel in New Kingston, focused on the theme: “The Impact of Airbnb on Real Estate Investments and Tourism.”

Responding to questions during the panel discussion at the symposium, Rose Bennett Cooper, chairman of the Rent Assessment Board, indicated that there are liabilities that short-term rental and owner-occupied proprietors should consider.

In respect of owners who choose to rent their homes on a short-term basis, the attorney-at-law noted that in the absence of specific regulations to govern the emerging market, there are other laws under which proprietors can be held liable.

“If you are paying me to stay in my place and I don’t take the necessary precautions in terms of food and otherwise, then you have certain rights and you can successfully bring action against me for failing to take the necessary steps to ensure there is food safety,” she said..

Insurance is another area which persons who rent their property on a short-term basis need to consider, Bennett Cooper stated.

“They need to see whether or not they can engage in conversations with their insurers to see what are some of the things they (the insurers) could direct them to in terms of protection,” she said.

Her point was supported by Keith Senior, consultant at JN Bank, who indicated that owners who rent their homes for short-term tenancy could be held liable for injuries sustained to their guests. Financial institutions primarily lend for the purpose of owner-occupied purchases.

“There are inherent risks associated with the business, and you need to insulate yourself, and take those liabilities into consideration,” Senior said.

Speaking from the floor at the symposium, Havannah Llewellyn, president of the Jamaica Home Sharing Association, said Airbnb provides a US$1 million policy for every booking made via its platform to indemnify its members who may face liability for injuries their guests may sustain.

“What we are doing is trying to get additional insurance for those individuals who book outside of Airbnb and also engage other platforms to do that,” he disclosed. He explained that the additional layer of insurance would be provided to protect members of the Home Sharing Association who receive bookings through other platforms that may not provide some form of insurance coverage.

Bennett Cooper advised that people who wish to enter the short-term rental market should have a conversation with the Tourism Product Development Company (TPDCo) to appreciate the “do’s and don’ts,” prior to renting their home on a short-term basis. TPDCo undertakes the assessment of players who want to enter the accommodation market and advises the Jamaica Tourist Board (JTB), which grants a licence.

Julian Patrick, director of product development and community tourism at TPDCo, explained that the same standards apply to hotels and short-term accommodations, in respect of safety; however, the issue of standards for short-term rentals has been a sore point for some time, even prior to the emergence of Airbnb.

“There are certain standards that must obtain for a business to operate and it’s difficult to adjust, let’s say, fire requirements and food handlers permit,” he said.

“There is no difference between a five-room guest house and a 50-room hotel. The basic quality standards for fire escape and fire protection liability- all must obtain,” Patrick underscored.

He added that TPDCo is actively exploring ways to make the licensing framework more efficient by bringing together other stakeholders, such as the National Environment and Planning Agency, the Fire Brigade and other safety officials, so that licences can be granted more quickly.

Although it may be useful to bring all short-term rentals under the same standards, Patrick and Bennett Cooper suggested that there are existing challenges, which make it necessary for the market to have its own set of regulations.

Bennett Cooper said that not all short-term rentals are targeted to tourism, while Patrick pointed to the existing dichotomy in the market. He explained that some accommodations are established to facilitate visitors who want to experience the specific community in which the accommodation is located, but in the majority of cases, short-term rentals facilitate persons coming to attend specific events, such as festivals or concerts.

Liabilities to owner-occupied proprietors

However, beyond the liabilities, which persons who rent their properties on a short-term basis expose themselves to, Bennett Cooper stated that these accommodations can create liabilities for their neighbours. Persons in strata communities, for example, could end up sharing the liability for a guest who injures herself while using a common or shared facility on the property.

“Remember that the owner of the common area is each individual proprietor that owns a proportionate share of the common spaces,” the attorney-at-law explained. “So if that short-term visitor was injured by the pool, or fell down the stairs somebody just wiped, or somebody dropped something and the person fell, then you’re talking about shared responsibility, because its shared ownership of the space,” she advised, noting that the probability of accidents may increase with the existence of more short-term units in strata communities.

However, while there are existing laws and by-laws, which govern the community or strata that residents can rely on, they are not being used effectively to mitigate against some of the challenges of short-term rental, Bennett Cooper explained.

“There are by-laws which you can’t change willy-nilly,” she said, explaining that under Schedule 1, restrictions are imposed on certain uses of common facilities and creates responsibilities, duties and obligations for the care of these spaces by the Strata Corporation. The schedule also dictates what activities individual proprietors cannot conduct in their units and common areas that may be a nuisance to other proprietors, their family members and visitors.

“Persons can come together and say these by-laws aren’t strong enough, or we are satisfied with them, or we want to change them. If you want to make changes to the ones in Schedule 1, then you need 75 per cent [of proprietors to] vote. But, the Strata Corporation can change the ones in Schedule 2, and the entire body can come together and decide that they want to add additional provisions,” she advised.

“So you might find yourself buying a unit in a complex and say, I’m going to use it for Airbnb, but the persons in the complex are already saying we are suffering as a result of short-term rental, and they come together and they make changes to the by-laws that impose restrictions to individual owners’ ability to rent the place for short-term use,” she stated. “This is one of the things that already exist.”

“Therefore, after buying the unit you may then discover that you cannot use it for short-term rental,” she emphasised.

The chair of the Rent Assessment Board revealed that similar by-laws are being drafted for gated communities, concerning shared spaces, and she noted that there are restrictions written into the covenants on titles which persons may also invoke to limit certain uses of the property or their neighbour’s property.

“Or you could look generally to the way in which your neighbour or member of the community is using their property to create a nuisance to you that is actionable and you can go to court and sue them on this basis,” Bennett Cooper advised.