No fines, no crimes: Denver imposes toughest penalties for Airbnb fraudsters as compliance soars

Fourteen months after the city council approved fines of up to $1,000 a day on booking providers like Airbnb and Vrbo for allowing customers to book a rental without a license, the city has yet to do so.

“This (policy) has caused the major players to step up and do a little more oversight themselves,” said Eric Escudero, spokesman for the Denver Excise and Licensing Department, which allows short-term rentals. .

Additionally, two and a half years after the Denver District Attorney’s Office charged four landlords with a felony related to the alleged attempt to rent something that wasn’t their primary residence – charges that have all been dropped. thereafter – the city did not refer a single additional case for possible prosecution. In Denver, only a primary residence can be listed for short-term rental.

The felony charges don’t stick

The charges against the four landlords in 2019 revolved around the fact that they signed an affidavit stating that the unit they sought to rent was their primary residence, as required by Denver law.

The city sent them the affidavit because they suspected the unit was not actually their primary residence. When they were returned with a signature, Denver District Attorney Beth McCann charged each of the four with one count of attempting to influence an official — essentially making a false statement.

At the time, an attorney for one of the defendants said Denver was the only city in America to file felony charges against individuals in connection with listing or attempting to list property on Airbnb.

Charges against all four were ultimately dismissed in 2019 and 2020. At the time, McCann’s office said it had not determined he could not prove any of the cases. The office attributed the decision to fire the other three in 2020 to the need to prioritize cases due to the coronavirus pandemic, saying it felt it could have won in court.

Although no cases have since been referred to McCann’s office for possible prosecution, Escudero said Denver still selectively uses affidavits in investigations when the city suspects the property is not the owner’s primary residence. or that there are complaints from neighbours.

The city has found no short-term rentals violating the primary residence requirement since 2020, he said.

The industry is watching

In addition to the $1,000 per day fine for booking sites, Denver has had an ordinance since 2017 that allows it to issue fines to owners of problematic and unlicensed short-term rental units.

Escudero said those fines have dropped dramatically. Denver issued 1,244 first warning fines of $150 before the end of 2020, when the city gave itself the power to issue fines to companies like Airbnb. Since 2021, the city has only issued five first warning fines.

Escudero said Denver’s license compliance rate across all short-term rental companies is about 90 percent. This is calculated using software that scans listings on the internet to determine if a property is licensed.

Escudero said complaints about short-term rentals were once the most reported issue to Denver’s 311 helpline. Now such complaints are rare, he said.

Escudero said after the business fines ordinance came into effect, rental websites began requiring short-term rental owners to submit their license number before posting a unit. .

“It’s extremely difficult to list a short-term rental without having a municipal license and subject to regulation and enforcement,” Escudero said.

In 2018 and 2019, the city issued 10 citations that resulted in public hearings related to primary residence issues, and two for allegedly violating neighborhood safety, according to data provided by Excise and Licenses. There were none left after those years.

The reduction in breaches was also likely caused by the pandemic, when active licenses also dropped significantly, Escudero said. There were 2,700 active licenses in August 2019 and only 1,877 in January 2021. As of December 1, there were 2,113 active licenses in Denver.

The city denied about 70 license applications between 2017 and 2020.

However, he said there may be more application later this year. The department has staff who conduct inspections weekly, Escudero said.