Denver couple face felony charge over Airbnb

[James Carlson]

Wow, this is interesting ... Denver has filed felony criminal charges against a Denver couple for operating multiple Airbnb short-term rentals in violation of the primary residence.

According to the people I talk to in the city, this has been a long time coming. The key point here is that anyone who applies for a short-term rental license with the city of Denver has to sign an affidavit affirming that the rental is your primary residence. The Denver district attorney's office says these folks -- real estate agents, no less -- lied on those forms. The formal charge is attempting to influence a public official. 

And we get this exact question all the time in our classes about Airbnb laws: Can my spouse and I have two different "primary residences." Yes, of course, if you happen to have a unique relationship and actually live in separate homes. The thrust of Denver's short-term rental law is clear: You can only rent out a place for short-term if it is where you live. We hear a lot of "creative" solutions to this for the savvy investor, but the city knows all those "creative solutions" and has been taking steps to crack down. 

We always advocate that you work within the law because:

1. It's the law
2. A legal investment is a better long-term investment
3. No one wants to look bad in the news; 
4. Running a successful, legal Airbnb is possible (within your primary residence or in Colorado Springs as a pure investment)

[Thadeous Larkin]

Prosecutor with over 6 years of experience here (including prosecuting a real estate-related fraud case):

Setting aside whether or not this is a JUST law (and not to be a keyboard warrior), but I don't imagine the people saying the charges will never stick have ever put anyone in jail and/or defended anyone in a felony case. 

Without knowing more facts than what has been presented here, there is probably not a problem with making a prima facie case against them (the public official being the planning office, the influence being the deceit on an affidavit, the public servant's decision being whether or not to grant the license...).  You can argue about whether or not the law is a good one, but not whether it applies in this case.  And in all likelihood it does.

The whole reason I'm writing this reply is not to say "You're a bunch of dorks who don't know what you're talking about."  My point is that some people may be encouraged by thinking "If they aren't convicted, it's all probably okay and I'll take my chances."  Just the court/attorney's fees alone can be crippling.  Try adding those into your BiggerPockets Calculator (TM, probably).  

Upshot:  Don't get cutesy with the law.