In the midst of the worst crisis this generation of short-term rental hosts has ever experienced, many of us have decided to switch to medium-term rentals until it all blows over. The impact that coronavirus has had on Airbnb hosts has forced us to use our properties in different ways.
Right now, short-term rental hosts around the world are desperate – having been sorely let down by Airbnb and seen their incomes seemingly vanish out of thin air – they’ll take anything, at any price, to try to maintain occupancy.
However, without a lease agreement, longer-term guests can cause trouble – both legally and financially for Airbnb hosts.
But it raises concerns for lots of us, namely, if you let the guest stay for longer than 30 days, will that put your property at risk of squatters?
Can squatters establish tenancy?
How can I be sure the guest will leave after the term is up?
Haven’t short-term rental hosts already been through enough?
First, we’ll look at some definitions of what a squatter really is, then we’ll see ways to prevent this from being the fate of your listing. Here’s how you can stay safe, pivot your rental model and continue to generate revenue with your property.
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What is a squatter?
First, let’s get a clear understanding of what a squatter is and isn’t.
Knowing what to call them won’t make the situation any easier, but it will help you know what legal solutions are available to you.
To get things straight – most of the time you aren’t dealing with a trespasser, which is a criminal form of entering your property without your consent. In the eyes of the law, squatters occupy your property with a ‘claim of ownership’, under something called adverse possession – but don’t let this term scare you. We’ll discuss this further below.
A squatter is someone who is occupying your property without owning, renting, or having any lawful reason for using it. When it comes to short-term rentals – guests who overstay their agreed welcome could be considered squatters. The thing is, in several states, like California, after staying in a unit for more than 30 days – the guest can be legally considered a tenant.
So what you’d really be dealing with in most cases is a holdover tenant.
A holdover tenant is what it sounds like: a tenant who refuses to vacate the property after the end of your agreement together. In this case, you’ll need to evict them. We discuss more how to avoid this from happening below.
What is adverse possession?
The way a squatter, in the legal meaning of the word, can get claim of ownership over your property is by something called adverse possession. This is a process by which they stay in your property long enough to be legally considered owners – without paying.
But don’t freak out – states require several years of occupation for adverse possession to apply. Every state has different statutes for adverse possession, all being at least 5 years, and some ranging to 20. Also, it only applies to properties where property tax is not being paid.
How do squatters establish tenancy?
Although guests who overstay their welcome aren’t technically squatters, let’s call them that for the purpose of this article.
In most states, anybody staying in your unit for more than 30 days (with your permission) is considered a tenant. If it’s without your permission, you could remove them on the basis of trespassing.
When a guest establishes tenancy, their occupying your unit becomes a civil matter and the police can’t do anything to get them out.
How to prevent your guest from obtaining tenant’s rights
You need to check tenancy laws in your state and county.
But usually, the only way to prevent your guest from obtaining tenant’s rights is to not let them stay longer than 30 days in your unit.
It’s not really a problem if they get tenant’s rights – it just means you need to create a formal agreement with them so that you can evict them if they breach the agreement.
You’d have to look at it more like a landlord’s perspective than a vacation rental host.
What are squatter rights?
The main difference between a squatter and a tenant is that squatters don’t pay rent. And that landlords never gave them permission to enter the residence. If you let a guest enter, they’re no longer considered a squatter by law.
However, squatters can argue they’ve paid through making improvements of the house – if the squatter makes any repairs or improvements to the property while they’re in it, they may be considered a tenant.
So if the squatter can somehow ‘prove’ they’re a tenant, you’ll need to go through the legally approved eviction process. If you give any sort of verbal permission to stay on your property after you’ve discovered the squatter, like saying “I’m done arguing about this” or “whatever”, it may be construed as permission, even if only verbal.
Squatter rights means they are awarded the adverse possession if you have done nothing to remove them within the given statute, which varies by state.
Here is a list of squatter rights by state.
Airbnb guest won’t leave
If your Airbnb guest won’t leave, and you have a rental agreement with them setting the check-out date (presumably under 30 days), you can lock them out or get them out on the basis of trespassing.
If the stay is longer than 30 days, you’ll need to take regular eviction processes.
How to prevent squatters
Here’s what you probably all came to this article for – how can you actually prevent squatters in your listing? Foundation
Don’t allow 30+ stay days
The easiest way to do this is to not allow guests to stay longer than 30 days. However, that’s not possible if you want to switch to medium or long-term rentals. If you want to pivot, then it’s time to consider them as tenants, not guests. In this case, you can create a rental/lease agreement.
Get a lease agreement
Get a lawyer to create a medium-term lease agreement that will protect you. This is the simplest solution and any breach of this agreement can be fought in court.
Vet potential medium-term rental tenants
Take time to vet your potential tenants. Get a feel for them – they’ll be staying in your unit for a while and you want to make sure they’re the right profile you’re looking for. If they’re medium-term travelers, ask them if they have return tickets, or ask if they want to meet for a tour of the property.
Check their social media accounts
Most people are on social media. Check their accounts to get a feel for what kind of person they are. If there’s no record of them at all, that’s a red flag. Same goes if they told you they have one job when their social says they have another.
Make all agreements in writing and leave a trail
Don’t make any agreements over the phone or in person that you don’t also put in writing and get written confirmation from them. Again, better to just create a contract.
Ask them the right questions
Make sure to screen your guests by asking them the right questions. Why do they want to rent out your unit? Why are they interested in your property? Where are they coming from? How long do they plan to stay in your unit and who is paying for it?
Verify their income & employment
Ask them for a pay stub, a W2 tax form, or simply ask them if you can call their employer.
If they’re self-employed, you can’t get a pay stub. In this case, ask for bank statements, which you can also do for retired people (but you probably won’t get too many retired people right now).
Don’t be desperate – stay picky with your guests/tenants
I know times are tough, but now is not the time to accept anybody.
Whatever you do – listen to your gut. If you get any spidey senses telling you the person is off, believe them and wait for the next possible tenant. Make sure you feel good about the person you place in your unit.
Use smart locks (with codes that change) and security cameras
You can also use keyless smart locks and change the code when they leave the unit after their stay is up so that they can’t get back inside. Note that if they have already obtained tenancy rights, this is illegal to do. Tread carefully.
How to evict a squatter
If your squatter has not obtained tenancy rights, you should be able to call the police and get them out on the basis of trespassing. If they’ve already been in for 30 days or more, in most places, the police won’t be able to do anything.
If they’ve obtained tenancy, you also can’t cut electricity or utilities, and you also can’t threaten and intimidate them.
The only way you can get them out is lawyering up and evicting them.
A word of caution
This is not meant to replace legal advice. I’m not a lawyer, and more importantly, I’m not YOUR lawyer. Please get professional legal advice if you need guidance making any of these decisions.
Download the Airbnb Crisis Survival Kit
Get techniques, swipe copy, lists of agencies and groups to contact to maintain occupancy, and more to keep your business alive.