Allard Schager/Getty Images
Cailey Rizzo
May 03, 2018

The city of San Francisco is seeking $5.5 million from two Airbnb owners who illegally rented out 14 apartments for nearly one year. They made more than $700,000 from the illegal rentals.

Darren and Valerie Lee own 45 apartments in 17 buildings across the city. San Francisco law restricts building owners to one short-term rental per building — and that apartment must be the owner’s home. According to the city’s lawyer, 14 of the Lees’ apartments were short-term rentals, rented under the names of friends and associates who pretended to be genuine tenants.

During inspection, the couple went through elaborate motions to make it appear like people actually lived there. But it was evident that it was a fraud.

“Every apartment had the same staging: the same Costco food items scattered about, the same arrangement of dirty breakfast dishes in every kitchen sink, same personal products in each bathroom, same damp towels artfully draped over doors as though someone had recently showered, the same collection of shoes and clothes in closets, and same houseplants in each apartment,” city lawyers wrote in the court filing.

The motion to the court seeks a penalty of $750 for every day that each apartment was available and $1,500 for every day that an apartment was rented. The penalty comes out to a grand total of $5.5 million. (Under state law, the penalty could have been as high as $30 million.)

San Francisco first sued the Lees in 2014 when they evicted tenants to turn their building into a collection of rentals to list on Airbnb. A year later, they settled for $276,000 and a promise to abide by short-term rental law.

The couple's “greed, fraud and deceit was breathtaking,” city attorney Dennis Herrera said in a statement.

The case will be heard in court on June 12.

Airbnb did not immediately respond to request for comment.

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