LA sues Vrbo for allegedly violating short-term rental law

The Los Angeles City Attorney’s Office announced a lawsuit Monday against the operator of the vacation rental platform Vrbo for allegedly processing rental bookings for unregistered hosts, in violation of the city’s Short-Term Rental Ordinance.

The city alleges that 29% of the 776 booking transactions violated the city’s ordinance between Nov. 7 and Dec. 7, the most recent period for which the city has booking data from HomeAway, which is a part of Expedia group and operates the Vrbo brand. Based on that data, the city’s lawsuit alleges that HomeAway processed thousands of transactions in violation of the ordinance since the law went into effect in November 2019.

Vrbo did not immediately respond to a request for comment on the allegation.

“We’re in the midst of a housing crisis. The (City) Council found that unregulated home sharing worsens our extreme housing shortage and contributes to increased rental costs, along with undermining the residential character of neighborhoods and increasing nuisance activity,” City Attorney Mike Feuer said.

“And when online platforms and hosts refuse to play by the rules, it allows them to compete unfairly with those who do, as well as depriving the city of much-needed revenue for basic services. HomeAway’s alleged flagrant violations of city law must end now.”

The Short-Term rental Ordinance was adopted in December 2018, prohibiting property owners from listing as a short-term rental, which is defined as 30 days or less, unless they meet certain criteria and register with the city.

Eligible hosts can submit an application, pay a fee and obtain a registration number from the Department of City Planning in order to list as a short-term rental. They are required to include their registration number on short-term rental listings, however, the city alleges that Vrbo did not require hosts to provide the number prior to listing their rentals.

The lawsuit seeks an order blocking HomeAway from violating the ordinance in the future. It is also seeking up to $2,500 for violating California’s Unfair Competition Law and up to $2,500 for violating the ordinance for each past unauthorized booking.