Airbnb in Israel

The legality of the Airbnb business has not been tested in Israel. However, that has not stopped Israel from being a very active country on the Airbnb website, with more than one thousand locations offered just in Tel Aviv alone. Despite various stakeholders that could have conflicting interests in the activities performed via Airbnb in Israel, no regulator has taken any action in respect of such activities.

Recently, the Airbnb business has hit what may be considered as an obstacle affecting the viability of the Airbnb platform in Tel Aviv.  A Tel Aviv resident, offering part of his apartment as a host to guests on, was indicted by the Tel Aviv municipality for, inter alia, renting part of his apartment via the website, without obtaining a zoning permit which will authorize him to use his apartment as a hotel. The indictment claims that the use of the apartment as done by the owner is not in line with the applicable authorized planning and zoning purpose. On top of that, the owner was also indicted for illegally dividing his apartment into two separate units – one in which he lives, and the other - which he offered on the Airbnb website; all of the above, without the required building permits.

The owner of the apartment claims that there is no applicable legislation that prevents him from renting his apartment, or part of it, for short periods of time, as long as the rented part is used for residential purposes. He further claims that the Tel Aviv municipality indicted him without taking into account the legal repercussions and ramifications and without adopting any clear policy regarding this matter – especially considering the significant amount of accommodation that is offered in Tel Aviv via the Airbnb platform. 

What is interesting is the position of the Tel Aviv municipality in response to the arguments raised by the defendant – such stance does not clearly suggest, one way or the other, whether the municipality considers the Airbnb website and activity to be illegal; rather, the municipality noted that this indictment has nothing to do with sub-letting an apartment while the owner travels abroad. The indictment, according to the municipality, is due to the owner performing building activities for the purpose of dividing his apartment into two units, one of them for business purposes, while his neighbors filed complaints with the municipality against such use.

It appears that the Tal Aviv municipality is of the opinion that there is nothing wrong with sporadically letting one's apartment; however, letting such an apartment on a regular basis, making this a business, is considered by the municipality as contravening the legislation in force. It follows that the municipality does not have an issue with the use of the Airbnb platform as such by apartments' owners, but rather with the use of such platform (or any other platform for that matter) which turns the apartment into a hotel of sorts, without the proper zoning permits .Further, having one's neighbors complain does not help the owners’ cause. 

In a recent court hearing regarding this indictment, the judge has suggested to both parties to try and reach some kind of compromise, and has set another hearing for February 2015. It remains to be seen whether the parties will use the next couple of months to reach some kind of compromise in this matter, or whether the court will issue a judgment that could provide an analysis of the legality of Airbnb in Tel Aviv, Israel.