Tuesday, October 16, 2018

Industry urges caution following Airbnb apartment tragedy

A leading accommodation body is calling for calm as the Victorian government faces intense criticism over its lack of regulation following Laa Chol’s death in an Airbnb rental apartment.

The 19-year-old law student was stabbed at a party in a Melbourne tower block rented through the short-let platform in one of a series of violent and destructive incidents at Airbnb rentals across the city. She died on July 21.

The Australian Resident Accommodation Managers Association (ARAMA) fears hastily-constructed laws passed under political pressure could result in legislation like that proposed for NSW – which has drawn widespread industry condemnation.

ARAMA has worked with the Victorian government for months on plans for measured changes which would see anyone managing Airbnb lets on behalf of a property owner required to have a licence.

Now Victorian premier Daniel Andrews is considering fast-tracking legislation which has been before the upper house of state parliament for more than a year and a half.  

CEO Trevor Rawnsley told Accomnews: “We want the state government to continue its consultative process with industry representatives like ARAMA, the Accommodation Association and those involved in the business of accommodation – and they must listen carefully to what we are saying.

“We strongly recommend that it is essential that any person who operates as a letting business on behalf of another person needs to hold a licence.

“This is absolutely critical.”  

The group proposes introduction of a ‘restricted letting agents licence’ which would require operators to invest in learning about a process Rawnsley says is sophisticated and requires training to master.

The licence would be just a “little hurdle” for operators, Rawnsley says, but one which would provide significant advantages.

“It ensures the identification of a person that is operating, and that the money coming in from a property needs to be managed through a trust account.

“It stops cowboy operators ripping off unit owners who don’t know if their property is being rented out for certain nights so don’t know if they’re being ripped off.

“If licenced, an operator must open a trust account and have it audited every few months.”

Richard Munro, CEO of the Accommodation Association of Australia, said the organisation has long held the view that consumer safety is the “number one consideration” for any short term letting policy.

“In the interests of consumer safety, all illegal short-stay accommodation should be banned and all premises currently being used illegally for short-stay accommodation should be subject to fines of not less than $1 million per day per premise for each day that they continue to be operated illegally,” he said.

“A go slow is not our approach.”

Rawnsley argues ARAMA’s proposals could help reduce the kind of situation in which Laa Chol lost her life.

“We know that incident in Melbourne could have happened anywhere, but it is less likely to occur when an operator is professional, licenced and following a business process that’s understood,” he said.

“Professional operators who understand how their business works would have a process to identify the number of people who are staying, and some kind of guarantee or credit card with pre-authorisation to cover any incidents as conditions of accommodation.

“The difference with Airbnb now is that new technologies allow non-professional operators to look professional.

“Airbnb don’t vet their operators and nor should they – they’re the booking platform.

“But the government needs to step in, just as they have for Uber, and say ‘if you want to put yourself up as an agent for someone else, you need to have a licence’.”

In the UK, meanwhile, a report by an all-party parliamentary group has identified serious issues with the short-let model, including “considerable concerns that hosts providing accommodation via sharing economy platforms do not comply with health and safety regulations”.

The group argues: “Local authorities claim professional landlords are converting residential long-term leasehold properties to short-term tourism accommodation businesses, leading to residential housing shortages and forcing up property prices.

And it concludes: “The operation of de-facto-hotels is damaging local communities . . . Residents complain that local communities are being adversely impacted.”

The report argues short-let platforms should take greater responsibility for informing hosts of their statutory obligations, recommending a new inspection regime and stipulations that hosts undertake fire and health and safety assessments and gas inspections.

It is the latest in a series of setbacks Airbnb has encountered in recent days.

The European Commission last week demanded the home share giant align its terms and conditions and the presentation of its prices with EU consumer rules.

And New York City council voted to require Airbnb to hand over the names and addresses of its hosts in the city so the council can police hosts that operate illegally and drive up community rents. Airbnb says the bill represents an unreasonable violation of users’ privacy, with the new legislation predicted to cut the city’s short lets by half when it comes into effect in January.

About Kate Jackson

Kate Jackson
Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: [email protected]

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One comment

  1. Don’t really think it’s fair to link this tragedy to Airbnb. Most onsite managers shut up shop at 5pm and would be unaware of a party going on several floors up. Similar tragedies have happened during Schoolies weeks, people overdosing or falling off balconies. There is no correlation to Airbnb in any of these incidents. If ARAMA start making too much noise about short term letting it could start up the whole building class issue that Melbourne had to face in the past. Airbnb will become a critical supplier at a much lower cost of acquisition over the next two years so stop trying to blame everything on them.

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