California Apartment Association

A pair of pro-landlord bills that would help regulate short-term vacation rental companies such as Airbnb, HomeAway and Flipkey have advanced to the Senate floor.

SB 761, sponsored by the California Apartment Association, would require online home-sharing sites to notify tenants that subletting their residence may constitute a lease violation.

This bill, authored by Sen. Isadore Hall, D-Los Angeles, passed the Judiciary Committee this month.

In California, most rental agreements prohibit subletting without the landlord’s permission. Many tenants who list properties on home-sharing sites, however, aren’t aware of this. The bill would require that short-term vacation rental companies do their part in educating their clients. This would help protect tenants from violating their lease, and it would help protect landlords who prohibit subletting.

“SB 761 provides tenants with important information about the important, potential legal risk of listing their room or unit on a short-term rental website and will help ensure the long-term stability and growth of this segment of the sharing economy,” Hall told the committee.

Prohibitions on subleting exist for good reasons. Tenants who sublet their apartments often give out security codes and keys, and vacationers who rent the units use the common areas, such as swimming pools, parking spaces and workout rooms, at disproportionate levels. Neighboring tenants complain to landlords about noise and traffic.

The other bill seeking to regulate short-term vacation rentals is SB 593 by Sen. Mike McGuire, D-Healdsburg.

This bill, which passed the Senate Governance and Finance Committee this month, would help local governments collect transient occupancy taxes from Internet-based hosting platforms. Such collection hasn’t been easy, despite the growth of online home-sharing into a multi-billion dollar industry.

“As cities and counties have witnessed, online vacation rental businesses are often about one-way sharing,” McGuire told the committee. “They share all the benefits of a local community’s services, but they often share none of the responsibilities. Local governments are left to shoulder the burden of enforcement and expense associated with this expanding industry.”

Moreover, SB 593 would help cities and counties that ban short-term rentals carry out enforcement. The bill, for example, would allow cities and counties to levy fines against the operator of a hosting platform for violating local laws.

Both SB 761 and SB 593 have until June 5 to be approved by the Senate. If this happens, they’ll head to the Assembly.