San Diego Woman Fined $25,000 By City For Renting Her Home Through AirBnB

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A San Diego woman is being fined $25,000 by the city of San Diego after renting out her home using AirBnB without a proper permit.

Because Rachel Smith, a 70-year-old retired schoolteacher who lives in San Diego’s historic Burlingame neighborhood, failed to obtain a conditional use permit as part of a recently passed statute for homeowners who decide to rent their homes using the website AirBnB, authorities contend she operated an illegal bed-and-breakfast. The permit in question can take up to a year to obtain and can cost anywhere between $5,000 to $10,000, according to Smith’s attorney, Omar Passons.

Smith argued in court that she was not running a business and did not offer her guests breakfast or any other amenities apart from a bed and shelter.

Judge Catriona Miller sided with the city of San Diego on August 5 and fined Smith $25,000, saying:

“The elements of a bed and breakfast statute were met: [Smith], while present, used her primary residence to provide lodging for less than 30 days to paying guests. While [Smith] did not serve breakfast regularly in this establishment, it is the type of establishment where breakfast is typically served.”

Smith had been notified that she violated a municipal code by a code-enforcement officer who came to inspect her home after a neighbor reported her to City Hall. Passons explained to Mashable:

“This is the first case in the City of San Diego in which a resident was subjected to any fine for renting out rooms in her home using Airbnb.”

Passons continued by explaining how “the City sent her a letter on about August 4th last year and said she could be fined up to $250,000 at a rate of $500/day,” and since Smith “didn’t have a way to know how she was breaking the law,” the daily fines piled up to the total of $25,000.

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Speaking on her experience, Smith told the San Diego Reader:

“I am a good neighbor. I have always intended to be a good neighbor. Unfortunately, it seems that gossip and subterfuge and tattling to city officials is more ‘neighborly’ where I live.

“I’ve learned a lot about how the city functions, or sometimes doesn’t function very well. I also learned, that the last time this city issued a Conditional Use Permit for a bed and breakfast was 10 years ago […] So, if there are hundreds of people, nine in Burlingame where I live, that have listings on AirBnB, and that, to my knowledge, I am the only one that has been investigated and fined, it seems clear that the ‘rules’ or ‘laws’ are not clear at all.”

As of February 2015, the city of San Diego has sent out 240 letters demanding AirBnB hosts pay taxes for renting out their rooms or homes.

Passons and Smith are now evaluating whether they should appeal the decision to the Superior Court.

The next time you think about renting out your place on AirBnB, you may want to check with your city to make sure it’s even legal — or at least hope you don’t have any crazy neighbors.

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