Things to Know Before Joining AirBNB

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The sharing economy is in its infancy in America, and around the world. People with time and assets are using them for their financial benefit. People with time and a vehicle are delivering clients via Uber, while people with property and an open bedroom are leasing it overnight to clients via AirBNB. It seems to be an easy way to make some extra money. Sometimes it’s money ‘on the side’, and sometimes it is a legitimate business. Either way there are expectations and liabilities that potential property owners should be aware of.

Many municipalities are struggling to react to the phenomenon of the sharing economy, especially with regard to AirBNB. Are they legitimate businesses? Should they be legitimate businesses? How can they be regulated? How can regulations be enforced? These questions, and many more, need to be addressed in small towns and big cities everywhere.

Most municipalities have zoning ordinances in place which define residential, commercial, and industrial zones and what can be done within these zones. Many neighborhoods are located in single family dwelling zones. Occupancy by more than a single family unit is prohibited by law. Separating a dwelling into multi family units or a commercial business requires permission from the local government that usually demands a public hearing. Neighbors within 300 feet, or more, are notified of the proposed zoning change for a special land use permit. The property owner, the neighbors, and the zoning board have a discussion to allow or disallow any changes.

Separating a single family home (or a multi-family home) into an AirBNB property is allowing a commercial operation in a residential zone. Neighbors are mostly concerned with traffic, parking, and activity. Regular bed and breakfast properties (B&Bs) have always needed a special land use permit to run that business in a residential zone. Permission is usually granted after improvements are made to make the home safe, neighborhood friendly, and compliant with building codes. Many AirBNB properties bypass the zoning board and just rent their spare rooms to overnight guests.

These are the main issues with AirBNB properties:

  • Parking
  • Absentee owners
  • Adequate water and sanitary sewer services
  • Electrical and safety standards
  • Bathing and lavatory facilities
  • Signage
  • Meals being served
  • Principle residence tax exemptions
  • Earned income
  • Collecting and reporting use tax
  • Appropriate homeowners insurance

Parking is a big issue in many neighborhoods. Neighboring property owners do not want their limited street parking spaces taken by non-residents, or otherwise clear streets crowded with curbside parking. To handle this, many cities require off-street parking for each rentable room, plus 2 spaces for the property owner. It is good to be a considerate neighbor.

Occasionally, tenants rent rooms (or whole houses) and throw big parties when the property owner is not present. This can create a nuisance in the neighborhood and could cause damage to the property. Owner occupancy while the property is leased is a good way to curtail any unauthorized use.

Many homes are not suited for the amount of water usage required by an unusual number of adults under one roof. Water flow, hot water availability, and sewer usage are legitimate concerns for home owners and their guests. An inspection for appropriate service is necessary and appropriate to avoid plumbing problems.

Many older homes have quirky electrical service, inadequate hand rails on staircases, and insufficient building code compliance. For the safety of guests, any non-conforming issues need to be identified by a professional, and corrected.

Many homes have just a bath and a half, or two full bathrooms. For the comfort of the home owner and the guests, separate and private bath facilities are expected. Properties without sufficient bathroom facilities are usually denied.

Appropriate signage is necessary to define the property being leased, while not being a nuisance to the neighbors. Strangers in a new town want to easily find the property they are renting, while the neighbors do not want to be bothered by travelers knocking on the wrong door. Additionally, local homeowners with their property for sale need to make potential buyers aware that there is a special use property in the neighborhood that may affect their decision to buy.

B&B means bed and breakfast. Breakfast may be served to overnight guests. Appropriate safe serving of food must be learned and practiced.

Be aware that valuable homestead tax credits may be lost if the home is not 100% residential.

Any income from overnight guests should be claimed. Know that the income will affect your property value and you will be taxed accordingly. Taking money ‘under the table’ when renting space on a nightly basis could subject the property owner to violations that could include fines and other repercussions.

Use tax needs to be collected and reported to the appropriate municipalities. That could include state, county, city, CVB, and other taxes. Collecting these taxes requires being assigned a federal tax identification number for reporting any income received and corresponding taxes due. Also note that any income acquired through a third party may be recorded with an annual 1099 income tax form. Additionally note that direct deposits may be recorded as income by your bank with an annual 1099 income tax form.

Homeowner must be aware that their regular insurance may not cover paying guests. Commercial liability insurance may be required to cover tenants temporarily living in your home. An appropriate amount of insurance for slips and falls, and unforeseen mishaps may be suggested or required.

These are the main issues that any property operating as a B&B needs to be aware of. AirBNBs and other nightly or vacation rental properties do not always think about the requirements involved in becoming a legitimate commercial business in a residential zone. They also may not be aware of the tax implications–both collecting and reporting. It is best to know your responsibilities before a surprise comes from your local government, law enforcement agency, or tax service.

 

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Published in: on April 22, 2016 at 12:07 am  Comments (1)  
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Movie Review: Batman vs. Superman: Dawn of Justice ****

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Batman vs. Superman: Dawn of Justice is a superhero movie pitting 2 major characters against each other. Superman is revered worldwide as a benevolent god. There is a major altercation in the desert–Superman is involved. There are major altercations in the city–Batman is involved. The government and the people are confused. They don’t know that they can trust either of them anymore. These two don’t even trust each other anymore. Add a young Lex Luther into the plot, and his plan for world domination pits the two superheros against each other.

This is a very good story that takes a long time to develop–it’s a 2 1/2 hour movie. I was engaged for the entire film and enjoyed the story, the characters, and the acting. My wife enjoyed the scenes where each of the actors were shirtless. There are no bonus scenes during or after the credits. The movie contains a lot of real violence that cause this movie to earn its PG-13 rating. I would not take sensitive kids or pre-teens to this movie–it’s more than a superhero flick. I liked it. 4 out of 5 stars.

Published in: on April 18, 2016 at 8:09 pm  Leave a Comment  
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Movie Review: London Has Fallen ****

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London Has Fallen is a terrorist attack movie that is the sequel to Olympus Has Fallen. The British Prime Minister dies unexpectedly. Dignitaries from around the world come to London to attend the funeral. A coordinated terrorist attack puts dozens of world leaders in peril, including the President of the United States. A Secret Service agent needs to protect the President and get him to safety.

This is a good story that depicts the problems associated with a gathering of world leaders, especially on the short notice of a major dignitary’s death. The technicalities of protecting so many VIPs is told very well. The story was very good, the acting was good, and the action was good–lots of gunfire and explosions. I was entertained. 4 out of 5 stars.

Published in: on April 18, 2016 at 8:06 pm  Leave a Comment  
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Movie Review: 10 Cloverfield Lane ***

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10 Cloverfield Lane is a suspense thriller about a paranoid guy who builds a bomb shelter on his farm. A young woman is driving down the road when she is run into a ditch and falls unconscious. She awakens to find herself and another guy in the home-made bomb shelter with a weird guy filled with conspiracy theories. He tells them that the country has been attacked and that it is not safe to go outside. They have no access to TV, news, or cell phone information, so they are forced to believe that what they have been told is true. Attempts are made to escape, before they finally go above ground and find out what is really gong on.

Good story with lots of intrigue. Good characters with good acting. Earns its PG-13 rating for violence and kidnapping. Definitely leave sensitive kids and pre-teens at home. The movie was good enough to get 3 out of 5 stars.

Published in: on April 18, 2016 at 8:04 pm  Leave a Comment  
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Hardcore Henry *

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Hardcore Henry is an action movie about a guy who wakes up with no memory and incredible skills. He gets a bionic arm and leg and who knows what else? The first person he meets is a woman who claims to be his wife. He is immediately attacked relentlessly by a legion of bad guys, but he takes them all out to protect his wife. A guy named Jimmy keeps appearing in disguises. Henry is not sure whether to trust him or not. Then there’s the bad guy, Akan. He’s got telekinetic powers and controls the legion of bad guys. I wasn’t sure why they were chasing him until the very end.

The movie is shot in first person, like a video game. You never see Henry’s face, because you are Henry. He is an expert at parkour, so you get to do a lot of flips, you get to climb buildings, and you do a lot of acrobatic things. It is enough to make you dizzy. The story was just OK, the action was good enough. I just didn’t like the movie. Actually, it was horrible. Only 3 people in the theater on Saturday of opening weekend. 1 out of 5 stars.

Published in: on April 18, 2016 at 7:59 pm  Leave a Comment  
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Movie Review: Confirmation*****

movie confirmation

Confirmation is the real life story about the Clarence Thomas Supreme Court confirmation hearings of 1991. A black Supreme Court justice retires and President George H.W. Bush appoints another black man as his replacement. During the vetting process, it is discovered that their may have been some impropriety towards women. A former employee, Anita Hill, is coaxed to divulge a character flaw that her boss had while they worked together. She reluctantly participates out of fear it could ruin her professional life as a law professor, while she thinks the truth must be told. The hearings are done live on TV as America tries to decide who is telling the truth. A he said-she said situation occurs that divides the country.

I lived through this and remember the situation and the players, but forgot most of the details. This movie is mostly about the struggle women in the workplace have always had. There has always been fear of retribution if they spoke up about inappropriate behavior at work. This is the first case of accusing a high ranking public official of sexual harassment that I can remember. This happened at a time when only 2 of 100 U.S. Senators were women. It is implied during the credits that had their been more female representatives at the time, the results of the hearings may have been different. The movie was excellently cast and the story was very well told by incorporating actual news clips of reporters and officials during the process. I loved it. 5 out of 5 stars.

Published in: on April 17, 2016 at 6:06 pm  Leave a Comment  
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