Come July 1, 2024, Californian short-term rental marketplaces will see a significant change in how they advertise their properties. Thanks to Assembly Bill No. 537, signed into law in October 2023, short-term lodging providers will need to ensure their advertised rates include all mandatory fees and charges, with the exception of government taxes and fees.
As HomieBees LLC we are proactively adjusting our practices to comply with the new legislation. Let's delve into what this law entails and how it will affect both rental platforms and consumers.
Understanding AB 537
Assembly Bill No. 537 adds Section 17568.6 to the Business and Professions Code, focusing on advertising regulations for short-term lodging. The key points include:
- Transparent Pricing: Short-term lodging providers must include all mandatory fees and charges, excluding government taxes and fees, in their advertised rates.
- Upfront Disclosure: The total price, inclusive of government taxes and fees, must be displayed to consumers before they reserve their stay.
- Civil Penalties: Violations of these provisions may incur civil penalties of up to $10,000 per offense, enforceable by city attorneys, district attorneys, county counsels, or the Attorney General.
Impact on Short-Term Rental Marketplaces
This law affects not only individual property owners but also online platforms like Airbnb, VRBO, Expedia.com, Booking.com, etc. Here's how:
- Price Transparency: With all fees included upfront, consumers can make more informed decisions when booking accommodations. This transparency enhances trust between renters and rental platforms.
- Compliance Costs: Short-term rental platforms will need to invest in systems and processes to ensure compliance with the new law. This may involve updating software, educating hosts, and implementing new advertising guidelines.
- Competitive Advantage: Platforms that swiftly adapt to the new regulations stand to gain a competitive edge. By demonstrating compliance and transparent pricing, they can attract more customers who value honesty and clarity.
- Legal Risks: Failure to comply with AB 537 could result in significant financial penalties. Rental platforms must prioritize adherence to avoid costly legal battles and damage to their reputation.
HomieBees LLC's Response
HomieBees LLC recognizes the importance of complying with AB 537 to maintain its reputation as a trustworthy short-term rental management company and a direct booking platform. As such, the company is taking several steps to ensure compliance:
- System Updates: HomieBees is updating its booking systems to include all mandatory fees in advertised rates and display the total price upfront, including government taxes and fees.
- Host Education: The platform is providing guidance to hosts on how to calculate and include all applicable fees in their listings to avoid any inadvertent violations.
- Legal Review: HomieBees is conducting a thorough legal review to ensure its practices align with the new law, mitigating the risk of non-compliance.
Conclusion
California's Assembly Bill No. 537 represents a significant step toward transparency and fairness in the short-term lodging industry. By requiring upfront disclosure of all fees, excluding government taxes, the law aims to protect consumers from deceptive advertising practices.
HomieBees LLC is committed to adapting its operations to comply with these regulations while continuing to provide excellent service to its customers. As the July 1 deadline approaches, both rental platforms and property owners must ensure they understand and adhere to the new requirements to avoid penalties and maintain trust within the marketplace.