Two fined over Airbnb rentals

Two Korean apartment owners have been fined a total of 1.4 million won ($1,170) for illegally renting their units through Airbnb in the country’s first crackdown on the popular online accommodation service.

The Seoul Central District Court fined the 34-year-old owner of an officetel unit 700,000 won on Sept. 18. He leased his residence in Jung District to a foreign tourist for 100,000 won per night from April to May.

He was charged by the local district office with breaching the Public Health Control Act.

An official from the local district office caught a foreigner coming out of the officetel, who confessed he had booked the residence via Airbnb,
according to an insider in the legal community.

In a separate ruling on Aug. 26, the Busan Local District Court fined a 55-year-old homemaker 700,000 won for renting her three-room house near Haeundae Beach in Busan to seven Koreans from February to July for 200,000 won a night.

Under the Public Health Control Act, any person involved in the hospitality business must register with the local district office.

“Anyone launching an accommodations business is supposed to be equipped with the facilities as stipulated by the related act and to report to the authorities,” said a judge in charge of external communications at the Seoul Central District Court. “Those who do not carry out the procedure are subject to criminal punishment.”

The two courts’ definition of Airbnb’s short-term rentals being illegal comes for the first time since Airbnb entered Korea in January 2013. About 11,000 premises across Korea are currently registered with the hospitality service.

Airbnb Korea says an annual average of 180,000 travelers - from Asia and the United States, in particular - use the service.

A spokeswoman for Airbnb Korea said the company advises on its homepage that its hosts thoroughly review regulations and laws before registering their residence for rent and
that they proceed with “responsible
hosting”.

“We are an open platform and operate in so many countries around the world that have all different regulations,” she said.

The homepage lists the links to the public Health Control Act, the Tourism Promotion Act and the Seoul Stay program, and says that should there be any inquiries about how those acts are applied, the hosts are advised to contact local authorities or lawyers.

Given the increasing size of the accommodation business that Airbnb and some other home-grown apartment-sharing services like BnBHero and Kozaza have attracted, local hotels and other legal accommodation providers have been demanding authorities scrutinize their activities.

Tourists choosing Airbnb may find short-term residences in desirable locations at costs cheaper than hotels or bed and breakfasts.

Those officially registered accommodation providers must pay related taxes and must meet standard fire,
security, safety, zoning and other
criteria.

Airbnb, which has grown considerably since it launched in 2008, has faced regulatory hurdles in many parts of the world, most notably in New York.

Airbnb’s Paris operation decided at the end of August to collect and remit taxes in a move to appease regulators by acting more like a hotel.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]