Can AirBnB collect damage reimbursement if no security deposit?

[Shad2]

Hello all,

I've seen numerous posts about security deposits, so I apologize if this is old material.  Recently a friend of mine began hosting his basement apartment on AirBnB, but chose not to have a security deposit, and the demand for his property seems to be exceptionally high.  Demand for my AirBnB rental is also high, but I have a $200 security deposit.  I looked at other similar AirBnB properties near me and noticed that many of them do not have a security deposit. (Most of these properties, like mine, have on-site hosts.)  My first question is whether the security deposit discourages responsible guests from booking reservations, and if by having one it puts me at a competitive disadvantage.

Second, does AirBnB have the means to collect money from the guest when there is no security deposit, or when damage exceeds the security deposit?  I understand that if AirBnB agrees with the host, having a security deposit makes the process easier for the host to get reimbursed for damage since there is a "hold" on the credit card. However, if I change my security deposit to zero, a guest causes $200 in damage, I file a claim through the Resolution Center, the guest doesn't agree or respond, and I escalate the matter to AirBnB who decides in my favor, wouldn't AirBnB still collect the $200 from the guest even without the security deposit?

Alternatively, I'm not clear what happens when a guest causes damage above the security deposit amount.  If AirBnB ultimately agrees with the host (say, $500 in damage but a $200 security deposit), would AirBnB be able to collect the additional $300 from the guest?  Presumably the Host Guarantee wouldn't apply for such a small amount -- i.e., this is not catastrophic damage.

It seems that if AirBnB has the capability to collect from the guest outside of the security deposit process, then what is the purpose of the security deposit?

Again, my hypothetical scenarios above assume that all the proper procedures, documentation, photos, and, if necessary, police reports are provided to AirBnB, and AirBnB agrees with the host on the damage amount.

Thanks!

[Gerry-And-Rashid0 · Accepted solution]

@Shad2

The simple principle is 'no security deposit' then you are relying solely on the good nature of your guest to admit to, and pay for the damage.

As you will have seen, claiming against the security deposit is not that easy - but it does at least send a signal that there may be a financial penalty.

As for affecting your competitivenss - balance this against guests who may choose a place precisely becuase there is no security deposit.

AirBnB can only collect up to the maximum of the security deposit - anything else is dependent on the guest paying up

[Shad2]

Gerry & Rashid,

Thank you for the reply.  I'm inclined to keep the security deposit in place because I had one guest (out of 150+) who I made a claim against and, despite the frustrations of other hosts in similar discussion rooms, AirBnB agreed with me and collected the money from the security deposit.  To be fair, there was plenty of evidence.

Thanks again.

[Paula252]

So, as I am new to this, I thought hosts were all covered by $1M prime insurance for the host property/guest injury, etc?  Why then would damage not be covered with or without a security deposit?

[Shad2]

Hi Paula,

That's basically the same question I had, but it appears that a number of people have had difficulties in making successful claims against the Host Guarantee. A security deposit, on the other hand, should be easier to draw from since there is already a hold on the guest's credit card. 

I think the the real value in the security deposit is its deterrence effect. Even if the deposit is small, it sends the message that there will be financial consequences for the guest if they damage your property. The Host Guarantee, on the other hand, is an AirBnB program, and it's not clear to me how a claim made against the Host Guarantee translates into a claim against a guest who damages your property. 

[Zacharias0]

The deposit exists because history has shown that crap happens and someone has to pay for the damage. Its easier to use the money that is being held versus asking for more money.

Airbnb states that "If we determine money is owed based on documentation and communication from both parties, we will move forward with collecting from the deposit. We reserve the right to collect payment from you [the guest] using the payment details we have on file."

The guest could change their payment details and never be seen from again and having that money on hold makes it easier. If you don't have a deposit on file you can collect from the Host Guarantee which states:  "The Airbnb Host Guarantee provides protection for up to $1,000,000 to a host for damages to covered property in the rare event of guest damages above the security deposit or if no security deposit is in place." Although I haven't read of too many hosts successful collecting against that guarantee. AirBnB seems to fight tooth and nail not to pay a host out.

Without the deposits perhaps you will get booked more, perhaps not.  It's hard to say what is drawing people to your friends place. He could be updating his listing everyday. One or two guests didn't want to book my place because of my security deposit, but those aren't the guests I want.

Have you tried adjusting your rate lower, offering a later check out time, or modifying your cleaning fee? Removing the cleaning fee seems to work a lot better as its an upfront real cost that can make or break some budgets. People don't like fees.

Best.

[Shad2]

Zacharias,

Thanks for the reply.  That's a good idea about dropping the cleaning fee.  I'll consider that.

On paper, the Host Guarantee that you quoted below seems to prove my point -- i.e., AirBnB will provide "protection" if there is no security deposit.  And so it would seem there's no point to having the security deposit if AirBnB will pony up the money when damage occurs, whether out of their own pockets or by pursuing their own claim against the guest.

But it seems that the reality is different in that the Host Guarantee appears to be a last-ditch option, and there could be all sorts of curveballs, notably the guest just cancelling their credit card and disappearing.

I wonder if AirBnB takes the same "hardline" approach when reviewing claims made against the security deposit vs. claims made against the Host Guarantee.  There seems to be plenty of anecdotal evidence where hosts are frustrated with both types of claims.

In any event, I'm planning to keep the security deposit in place.

Thanks again.

[Andie5]

Airbnb does not hold the deposit.

[Eric155]

its hard to collect on the security deposit. even if you have pictures. I had two airbnb guests departing/arriving 1 day apart. I saw I had to make a claim within 14 days of departure, now I learn that it has to be made before next guest arrives. I have notification of the damage but did not request renter pay me unti 2 days later. Under Ab policy that is too late. So airbnb just loses another hosted place. I can't have guests coming in a breaking chairs and getting away with it. I'm not a hotel chain, that's why I'm on here.

[Roberta150]

We don't have to rely solely on Airbnb for reimbursement: Take them to small claims court (up to $5000 for businesses in most states.) I've had to accept (can't cancel) a booking for one night with a "service dog." Since it's illegal to ask for proof of service dog status and the Airbnb no discrimination policy covers service animals, I am stuck. I don't have a security deposit in place because when I tried that - even for a low $100 - my bookings stopped completely and almost all my guests are great with the only occasional problem guest. Luckily so far I've been lucky probably because I'm on premises, except for the student who snuck in a non-service small lap dog who marked "his" territory on a potted plant and the adjacent floor. Luckily distilled white vinegar and baking soda got out the smell. Otherwise, guests have not damaged my property except for a little normal expected wear and tear (marks on a few walls from suitcases, a couple small chips on the floor.)

So here's my plan to protect myself and my property for the upcoming chihuahua "service dog" one night visit: Prior to their arrival on that day my neighbor is coming over and will do a sniff test throughout the house so I have a witness there is NO urine or other smells or damages here. The guest plans on leaving before 4 am to take her mother to the train station, so will probably be off site before I wake up the next day. But if I smell or see any dog-related damage, my neighbor will be called into re-inspect my property and verify the damage/smells so they can testify in court.

I will then take any relevant photos, message the guest the estimated damages and that I have a witness. If they are honorable they will send me funds (yeah, right), then I'll contact Airbnb to see if they will do anything. AND I will file a claim in small claims court since I have her full name and city (she's from my state.) I will pursue it vehemently through the court system. So that's my plan. 

I have messaged the guest telling her to prevent any dog-related damages and told her she will be liable if there are any and I will pursue payment by all available means. Please wish me luck. She arrives in a couple weeks so if there is a problem I will keep you posted here. Wanted to remind everyone that Airbnb is not the only avenue to payment. For business damages up to $5000, you can take them to small claims court. It's inexpensive to file and since it occurred on your property they have to come back to your jurisdiction if they want to have their say in court, even if they have to fly in from France or wherever. But make darn sure you have proof of the damages because if you lose they can ask for reimbursement of any court-related expenses from you including travel expenses and lost wages.

Wanted to remind everyone that Airbnb is not the only avenue for payment for damages. For business damages up to $5000, you can take them to small claims court. It's inexpensive to file and since it occurred on your property they have to come back to your jurisdiction if they want to have their say in court, even if they have to fly in from France or wherever. But make darn sure you have proof of the damages because if you lose they can ask for reimbursement of any court-related expenses from you including travel expenses and lost wages.

[Osvaldo29]

If they are in France how would your court get you money? It’s not even a federal court so it’s not like they will pin her down at the international airport and rip her wallet out. And no financial jurisdiction over her French banks either.

[Susan1784]

Service animals are an extension of the guest and should be properly trained not to mark on anything. You have to be very careful with what you claim as you can be sued for discrimination, especially since you posted your hesitation in a public forum. 

[Stephanie-S-0]

I'm responding to this because I am a host in the Chicago area in close proximity to college towns, with a large house out in the country. I have discovered that this makes me a prime target of college students. To be fair, I have successfully hosted numerous college age student groups for academic reasons. However, I have also had the college kids play me and so there have been two unauthorized parties at my house. For the first one, I pushed and pushed to collect on damages. The children were asked how much they thought they should have to pay for their Homecoming party. The guest who did the booking decided he should have to pay 250, so he did. However, I went on to collect 700 more in damages from Air BnB by threatening to speak to the press about my experience. Then I was asked to sign a paper saying I would tell no one about this. (I assume they meant the press, not this forum.) That is what it took to collect more money. I did not have a security deposit at the time. So, I decided I would always have one in the future. The problem is, when severe damage is done to your home, and you get passed onto the Trust and Safety department at Air BnB, you might bypass the Resolution Center. If this happens, you must rely on Air BnB's special-thread email team to respond to you, which they often delay doing. I will refrain from commenting too extensively on the current party I am cleaning up from. However, I am preparing to have to fight to be compensated, so I've had the police over and have had a police report made and am starting to turn in invoices and receipts. You must make sure you have professional invoices to prove you cleaned up damage/ made repairs, and receipts for replacement of items, to make your case stronger that you deserve to be reimbursed for damages--whether that party is large or small. 

[Matthew505]

WARNING -  Do not waste your time with a security deposit with Airbnb!    It is totally worthless as they do not pay out.  Airbnbs policy is NOT to pay out!   I am pretty sure they train their case managers to be as unhelpful and almost obstructive when it comes to making a claim.

My blood is boiling as we speak as yet again when i have had to make a claim for a guest issue i have had to fight a battle and lost for no reason .  All they do is throw obstacles in your way and constantly change their policies and reasonings.

I am a property manager and list 34 properties with them with a turnover of $250K with Airbnb.  I have over 360 reviews averaging 4.9.    I am not a bad landlord or agent, i look after my homes and my guests but get treated like trash from Airbnb.  Airbnb needs to realize that without owners and managers like me they would not have a produce to sell.  They would have no business.

Their PC philosophy i believe has actually turned 180 degrees and instead of it being there to protect both parties, the host and the guest, it has become very much biased towards the guest.  I expect because they don’t want bad reviews from guests saying Airbnb took my money!   Well do you know what,   in my experience those guests who have had money deducted from them have had money deducted for a reason.

In 3 years i have had to probably make a dozen claims.  Every single claim maybe except for 1 or 2 claims is like strapping on my armor and heading in to battle.   Almost every single claim takes over an hour of my time writing emails to case managers who are not interested in facts, pictures they are just interested in paying out as little as possible and if anything at all.   I would not be surprised at all if they are targeted on paying out  a percentage of the actual claim.

I have had numerous claims that have taken up 3+ hours of my time and effort.  The previous claim prior to this one which has made me write this report was for a guest who used the home to hold a drunken birthday party.   Even though we clearly state in the advert and house rules no parties or gatherings are allowed.  The guest put a hole in one of the bedroom walls and we had hand prints with dirt and blood all over the walls and house.  They also badly stained a number of towels.  So i claimed for extra cleaning time, 2 towels and a repair to the wall.   It was all done on headed paper with the correct amounts.  Photos and invoices were attached. Airbnb did not want to pay, they then decided they wanted external quotes for the repair and cleaning.   My company is a property management and maintenance company, this is what we do.  I quoted $7 for each towel and $35 for the repair to the 3" hole in the wall.  $35!!!      Airbnb insisted that i get a quote for this, i explained that if i get a quote for this it would be around $75 - $100 for a company to come in and repair this.   So i am saving them / guest money.   This claim nearly took 2 hours of solid arguing and writing and it was not until i threatened to write to the board that this got resolved.

So todays battle against Airbnb is for a guest who trashed a home and it cost an extra $50 in cleaning and they damaged 2 bath towels, they were found in a  cupboard covered in human excrement!  They also badly stained 2 hand towels and 2 pillow cases.  So this time the external cleaning company i use  invoiced me for the replacements and the extra cleaning time.   This was forwarded on the day of the guest leaving along with photos of the damaged items.

Two days later i receive an email from the case manager telling me i need to send receipts and a correct invoice?   When i questioned what was wrong with the one i sent she said it was not valid.     So i responded that these invoices are valid with the IRS and both my account and the cleaning companies  accountant so why was is not valid for AIRBNB?  No answer!

After 2 more sets of emails i was asked for receipt of the towels.  I explained to her that i do not have receipts because i personally did not replace the items as the cleaning company did and that Airbnb will not allow me to claim direct because you want it from an external company, therefor how can i give you a receipt.   So i tried to explain to her that the receipt is the invoice, it is a valid invoice stating the price i have paid for the replacement towels. They refused to accept the invoice but wouldn’t tell me why. They kept asking for different photos, even though they had them all.  In the end they sent me an email telling me they were refunding me $12.99, because that is the price for a hand and a bath towel from Amazon Basics!   That is very nice of them to assume i use the cheapest of towels possible.  

At this point i receive a response from the guest apologizing and admitting the damage and saying he would pay, he never paid but it is in the message thread that he admits to it.

So when i questioned Airbnb that when they can see the guest has admitted to the claim and that the claim covers more than 2 towels, why have they only paid out $12.99.   I got a response saying i have not supplied enough information!!!!!   Are you kidding me!!

I believe that Airbnb purposely make it hard and frustrating to make a claim to stop from hosts doing so.

The problem here is that yes it will stop me from making a claim because they will no longer have my business.  They have decided not to upset a guest who i have proven has wiped his bum on my towels and trashed my house, but to upset their client who gives them a product to sell and generates $250K with them per annum.   

I have now listed my homes with as many similar sites as i can possibly find just so i have less booking with Airbnb and eventually all of my homes will be removed and at that point i would have expected to have 50+  homes listed with them generating close to $500K.

AIRBNB NEEDS TO RE THINK THEIR POLICY ON CLAIMS

[Starline-Real-Estate0]

Totally agree. I’ve had similar experiences. Very frustrating. I don’t feel protected as a host. This is, in my opinion, the biggest problem with airbnb.