Existing law, commencing July 1, 2024, prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, and requires that they include in the total price to be paid, all taxes and fees imposed by a government on the stay before the consumer reserves the stay. Existing law makes a violation of these provisions subject to a specified civil penalty not to exceed $10,000 and authorizes an action to enforce these provisions to be brought by a city attorney, district attorney, county counsel, or the Attorney General.

This bill would require a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to also disclose any additional fees or charges that will be added to the total price to be paid, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay, as specified. The bill would also require a place of short-term lodging or any other person that advertises or lists a place of short-term lodging as available to rent on an internet website, application, or other similar centralized platform to include in their short-term lodging listing on the internet website, application, or platform the information that the bill requires to be disclosed to the consumer. The bill would also make a person who knew or should have known that it has advertised, displayed, or offered a place of short-term lodging in violation of these provisions subject to civil penalty and enforcement provisions as described above. The bill would make its provisions operative on July 1, 2025.

Existing law, commencing July 1, 2024, prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, and requires that they include in the total price to be paid, all taxes and fees imposed by a government on the stay before the consumer reserves the stay. Existing law makes a violation of these provisions subject to a specified civil penalty not to exceed $10,000 and authorizes an action to enforce these provisions to be brought by a city attorney, district attorney, county counsel, or the Attorney General.

This bill would require a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to also disclose any additional fees or charges that will be added to the total price to be paid, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay, as specified. The bill would also require a place of short-term lodging or any other person that advertises or lists a place of short-term lodging as available to rent on an internet website, application, or other similar centralized platform to include in their short-term lodging listing on the internet website, application, or platform the information that the bill requires to be disclosed to the consumer. The bill would also make a person who knew or should have known that it has advertised, displayed, or offered a place of short-term lodging in violation of these provisions subject to civil penalty and enforcement provisions as described above. The bill would make its provisions operative on July 1, 2025.

Existing law, commencing July 1, 2024, prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, and requires that they include in the total price to be paid, all taxes and fees imposed by a government on the stay before the consumer reserves the stay. Existing law makes a violation of these provisions subject to a specified civil penalty not to exceed $10,000 and authorizes an action to enforce these provisions to be brought by a city attorney, district attorney, county counsel, or the Attorney General.

This bill would require a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to also disclose any additional fees or charges that will be added to the total price to be paid, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay, and to explicitly describe the cleaning tasks in a written or electronic notice that is affirmatively acknowledged by the consumer before the consumer reserves the stay. as specified. The bill would also require a place of short-term lodging or any other person that advertises or lists a place of short-term lodging as available to rent on an internet website, application, or other similar centralized platform to include in their short-term lodging listing on the internet website, application, or platform the information that the bill requires to be disclosed to the consumer. The bill would also make a violation of its person who knew or should have known that it has advertised, displayed, or offered a place of short-term lodging in violation of these provisions subject to the specified civil penalty and enforcement provisions as described above. The bill would make its provisions operative on July 1, 2025.

Existing law requires a hosting platform, as defined, to provide a specified notice to an offeror listing a residence for short-term rental on the hosting platform, as provided.

This bill would make a nonsubstantive change to these provisions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2202

Author:(Rendon)

As Amended Ver:August 15, 2024

Majority vote

SUMMARY

Requires property owners and short-term lodging platforms to disclose cleaning tasks that guests must complete while staying at a place of short-term lodging to avoid an additional fee or penalty.

Senate Amendments

1. Repeal, revise, and recast the provisions of the bill in a new code section;
2. Specify that a place of short-term lodging or any other person that advertises or lists a place of short-term lodging as available to rent on an internet website, application, or other similar centralized platform must include in their short-term lodging listing any additional fees or charges that it will add to the total price to be paid if the consumer fails to perform certain cleaning tasks at the end of the stay and an explicit description of the cleaning tasks;
3. Specify that a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person, must disclose any additional fees or charges, or other penalty, that will be imposed if the consumer fails to perform certain cleaning tasks and an explicit description of those cleaning tasks in a notice that is to be affirmatively acknowledged by the consumer before the consumer reserves a stay at the advertised or listed place of short-term lodging;
4. Exempt hotels, including residential hotels, motels, bed and breakfasts, and other transient lodging establishments from the requirements of the bill;
5. Narrow the definition of short-term lodging to include only those in California;
6. Delay implementation to July 1, 2025; and
7. Make clarifying and conforming changes.

COMMENTS

Numerous articles and social media posts suggest widespread consumer frustration with the cleaning requirements imposed by short-term rental (e.g. Airbnb and VRBO) hosts. While existing law requires price transparency for all short-term rentals, hotels, motels, and the like, there is currently no requirement to disclose cleaning responsibilities (e.g. strip beds, take out the trash, vacuum, or start a load of laundry) that if left uncompleted would result in the guest having to pay a fee or risk being penalized by, for example, a low guest rating.

Guests' dissatisfaction stems in part from often having to complete specified chores in addition to paying a cleaning fee. In 2022, a NerdWallet analysis of 1,000 U.S. Airbnb reservations for a one-night stay with check-in dates in 2022 or 2023 revealed that 85% of listings included a cleaning fee, the median of which was $75. Moreover, the analysis found that cleaning fees accounted for roughly 25% of the total price per booking.

According to the author, Airbnb has endeavored to address guests' complaints by directing property owners to disclose cleaning requirements prior to booking. Upon review of several Airbnb listings, it appears that owners may disclose chores via the host's house rules, which are viewable at the bottom of the listing alongside safety information and the host's cancellation policy. When consumers press the "Request to book" or "Confirm and pay" button, they agree to the host's house rules, including any cleaning requirements. This committee is not aware of other sites requiring hosts to disclose guest cleaning requirements.

1. This bill would require property owners to include in short-term lodging advertisements and listings any additional fees or charges that they will add to the total price of the stay if a guest fails to perform certain cleaning tasks as well as an explicit description of those cleaning tasks. Additionally, this bill would require platforms that advertise or list places of short-term lodging for rent to disclose any additional fees or charges, or other penalty, that will be imposed by either the property owner or platform if a guest fails to perform certain cleaning tasks and an explicit description of cleaning tasks required by both the property owner and platform, if any. The disclosure must be in a notice that is affirmatively acknowledged by the guest before they reserve a stay at the advertised or listed place of short-term lodging.

According to the Author

"Transparency helps California's consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals."

Arguments in Support

The Consumer Federation of California and Consumer Watchdog collectively write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of "double paying," which appears to be an unfair business practice under California law.

California's consumers deserve greater transparency when it comes to what duties they are being asked to complete at short-term vacation rentals. AB 2202 will solve this issue by increasing transparency for consumers and requiring that all cleaning tasks that a renter is asked to complete before leaving a short-term vacation rental property be prominently disclosed prior to rental. It also will require that any penalty for not completing these tasks, including a drop in your guest review or additional fees, be disclosed prior to booking.

Arguments in Opposition

The Travel Technology Association and Booking Holdings requested several amendments to the prior iteration of this bill in an "oppose unless amended" letter dated June 14, 2024. Those amendments have been incorporated into the bill, with the exception of one: "Reduce the penalties for non-compliance from $10,000 per violation."

FISCAL COMMENTS

According to the Senate Appropriations Committee:

Cost pressures (Trial Court Trust Fund, General Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.

VOTES:

ASM BUSINESS AND PROFESSIONS: 16-1-1

YES: Berman, Flora, Alanis, Bains, Juan Carrillo, Chen, Grayson, Irwin, Jackson, Low, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Soria, Zbur

NO: Dixon

ABS, ABST OR NV: Sanchez

ASM APPROPRIATIONS: 13-1-1

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

NO: Dixon

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 65-0-15

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gabriel, Gallagher, Holden, Mathis, Joe Patterson, Luz Rivas, Sanchez, Wilson

SENATE FLOOR: 35-4-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

NO: Alvarado-Gil, Dahle, Jones, Seyarto

ABS, ABST OR NV: Nguyen

UPDATED

VERSION: August 15, 2024

CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0004732

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2202

Author:(Rendon)

As Amended Ver:August 15, 2024

Majority vote

SUMMARY

Requires property owners and short-term lodging platforms to disclose cleaning tasks that guests must complete while staying at a place of short-term lodging to avoid an additional fee or penalty.

Senate Amendments

1. Repeal, revise, and recast the provisions of the bill in a new code section;
2. Specify that a place of short-term lodging or any other person that advertises or lists a place of short-term lodging as available to rent on an internet website, application, or other similar centralized platform must include in their short-term lodging listing any additional fees or charges that it will add to the total price to be paid if the consumer fails to perform certain cleaning tasks at the end of the stay and an explicit description of the cleaning tasks;
3. Specify that a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person, must disclose any additional fees or charges, or other penalty, that will be imposed if the consumer fails to perform certain cleaning tasks and an explicit description of those cleaning tasks in a notice that is to be affirmatively acknowledged by the consumer before the consumer reserves a stay at the advertised or listed place of short-term lodging;
4. Exempt hotels, including residential hotels, motels, bed and breakfasts, and other transient lodging establishments from the requirements of the bill;
5. Narrow the definition of short-term lodging to include only those in California;
6. Delay implementation to July 1, 2025; and
7. Make clarifying and conforming changes.

COMMENTS

Numerous articles and social media posts suggest widespread consumer frustration with the cleaning requirements imposed by short-term rental (e.g. Airbnb and VRBO) hosts. While existing law requires price transparency for all short-term rentals, hotels, motels, and the like, there is currently no requirement to disclose cleaning responsibilities (e.g. strip beds, take out the trash, vacuum, or start a load of laundry) that if left uncompleted would result in the guest having to pay a fee or risk being penalized by, for example, a low guest rating.

Guests' dissatisfaction stems in part from often having to complete specified chores in addition to paying a cleaning fee. In 2022, a NerdWallet analysis of 1,000 U.S. Airbnb reservations for a one-night stay with check-in dates in 2022 or 2023 revealed that 85% of listings included a cleaning fee, the median of which was $75. Moreover, the analysis found that cleaning fees accounted for roughly 25% of the total price per booking.

According to the author, Airbnb has endeavored to address guests' complaints by directing property owners to disclose cleaning requirements prior to booking. Upon review of several Airbnb listings, it appears that owners may disclose chores via the host's house rules, which are viewable at the bottom of the listing alongside safety information and the host's cancellation policy. When consumers press the "Request to book" or "Confirm and pay" button, they agree to the host's house rules, including any cleaning requirements. This committee is not aware of other sites requiring hosts to disclose guest cleaning requirements.

1. This bill would require property owners to include in short-term lodging advertisements and listings any additional fees or charges that they will add to the total price of the stay if a guest fails to perform certain cleaning tasks as well as an explicit description of those cleaning tasks. Additionally, this bill would require platforms that advertise or list places of short-term lodging for rent to disclose any additional fees or charges, or other penalty, that will be imposed by either the property owner or platform if a guest fails to perform certain cleaning tasks and an explicit description of cleaning tasks required by both the property owner and platform, if any. The disclosure must be in a notice that is affirmatively acknowledged by the guest before they reserve a stay at the advertised or listed place of short-term lodging.

According to the Author

"Transparency helps California's consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals."

Arguments in Support

The Consumer Federation of California and Consumer Watchdog collectively write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of "double paying," which appears to be an unfair business practice under California law.

California's consumers deserve greater transparency when it comes to what duties they are being asked to complete at short-term vacation rentals. AB 2202 will solve this issue by increasing transparency for consumers and requiring that all cleaning tasks that a renter is asked to complete before leaving a short-term vacation rental property be prominently disclosed prior to rental. It also will require that any penalty for not completing these tasks, including a drop in your guest review or additional fees, be disclosed prior to booking.

Arguments in Opposition

The Travel Technology Association and Booking Holdings requested several amendments to the prior iteration of this bill in an "oppose unless amended" letter dated June 14, 2024. Those amendments have been incorporated into the bill, with the exception of one: "Reduce the penalties for non-compliance from $10,000 per violation."

FISCAL COMMENTS

According to the Senate Appropriations Committee:

Cost pressures (Trial Court Trust Fund, General Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.

VOTES:

ASM BUSINESS AND PROFESSIONS: 16-1-1

YES: Berman, Flora, Alanis, Bains, Juan Carrillo, Chen, Grayson, Irwin, Jackson, Low, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Soria, Zbur

NO: Dixon

ABS, ABST OR NV: Sanchez

ASM APPROPRIATIONS: 13-1-1

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

NO: Dixon

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 65-0-15

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gabriel, Gallagher, Holden, Mathis, Joe Patterson, Luz Rivas, Sanchez, Wilson

UPDATED

VERSION: August 15, 2024

CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0004732

 THIRD READING  

Bill No: AB 2202

Author: Rendon (D), et al.

Amended: 8/15/24 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 10-0, 6/18/24

AYES: Umberg, Wilk, Allen, Ashby, Caballero, Durazo, Niello, Roth, Stern, Wahab

NO VOTE RECORDED: Laird

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/15/24

AYES: Caballero, Ashby, Becker, Bradford, Wahab

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 65-0, 5/21/24 - See last page for vote

SUBJECT: Short-term rentals: disclosure: cleaning tasks

SOURCE: Author

DIGEST:

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees and charges that will be added if a consumer fails to complete certain cleaning tasks and a description of those tasks, as provided.

ANALYSIS:

Existing law:

1. Defines “short-term lodging” as any hotel, motel, bed and breakfast inn, or other transient lodging. It also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform whereby the rental is advertised, displayed, or offered and payments for the rental are processed. (Bus. & Prof. Code § 17568.6(b).)
2. Prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate, as defined, that does not include all fees or charges required to stay at the short-term lodging except taxes and fees imposed by a government on the stay. This applies to any advertising, display, or offer before the public in this state, or from this state before the public in any state. (Bus. & Prof. Code § 17568.6(a)(1).)
3. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include in the total price to be paid, before the consumer reserves the stay, all taxes and fees imposed by a government on the stay. (Bus. & Prof. Code § 17568.6(a)(2).)
4. Provides that a person that knew or should have known that it has advertised, displayed, or offered a room rate in violation of the above shall be subject to a civil penalty not exceeding $10,000 for each violation. An action to enforce this section may be brought by a city attorney, district attorney, county counsel, or the Attorney General. (Bus. & Prof. Code § 17568.6(e).)

This bill:

1. Requires, starting July 1, 2025, a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include both of the following in a notice that is affirmatively acknowledged by the consumer, before the consumer reserves the stay:
   1. A disclosure of any additional fees or charges that will be added to the total price to be paid to stay at the short-term lodging, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay.
   2. An explicit description of the cleaning tasks subject to the additional fees, charges, or penalties described above.
2. Defines the following terms:
   1. “Notice” means a written or electronic statement that is presented to the consumer in a font size that is at least as large as the standard or default font size of the other text in the advertisement or that is displayed on the internet website, platform, application, or other centralized platform and requires that the consumer interact with the internet website, application, or platform to affirmatively acknowledge that they have read the notice. Affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
   2. “Penalty” means subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers including, but not limited to, designating or threatening to designate the consumer as a less favorable guest, decreasing or threatening to decrease the consumer’s status with or on the short-term lodging, internet website, application, or other similar centralized platform, or hindering or barring the consumer from reserving a stay at a place of short-term lodging that would otherwise be advertised or available to the consumer to view and reserve on the internet website, application, or platform.
   3. “Short-term lodging” means a short-term rental, or a residential property in this state that is rented to a visitor for 30 consecutive days or less through a centralized platform whereby the rental is advertised, displayed, or offered and payments for the rental are processed, but does not include a hotel, motel, bed and breakfast inn, or other similar transient lodging establishment located in this state, nor does it include a residential hotel, as defined in Section 50519 of the Health and Safety Code.

Background

The issue of “junk” fees and other pricing schemes gained more prominence nationally when President Joe Biden took aim at them in his State of the Union address in February 2023. There are various types of pricing and charging schemes generally deemed unfair or unlawful business practices. One growing industry for price opacity is in the short-term lodging industry with the most infamous hidden charge being the “resort fee.”

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees, charges, or other penalties that will be added if a consumer fails to complete certain cleaning tasks. The notice must also include a description of those tasks and be provided before the consumer reserves the stay. The bill subjects violations to public enforcement and civil penalties of up to $10,000 per violation.

The bill is author-sponsored. It is supported by the Consumer Federation of California and Consumer Watchdog. It is opposed by a travel technology association.

Comments

A host of bills have been introduced, with some signed into law, in the California Legislature this session to combat these deceptive practices at the state level. One bill, SB 425 (Dodd, Ch. 400, Stats. 2023) made it an unlawful business practice to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges, except as provided or exempted.

Another bill, AB 537 (Berman, Ch. 805, Stats. 2023), targeted short-term lodging. It specifically addressed the practice of offering certain rates that do not include all attendant fees and charges, commonly referred to as drip pricing. The Federal Trade Commission (FTC) defines drip pricing as a “pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process. The additional charges can be mandatory charges, such as hotel resort fees, or fees for optional upgrades and add-ons.”^[1] This bill builds off of this law and targets the sometimes hidden cleaning fees associated with short-term rentals.

According to the author:

Transparency helps California’s consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, as opposed to upon arrival at the vacation home, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to provide consumers a clear notice before the consumer reserves the stay. The notice must disclose any additional fees, charges, or penalties that will be added or imposed if the consumer does not complete certain cleaning tasks at the end of the stay. The notice must also include an explicit description of what those cleaning tasks are. To ensure the consumer is adequately warned of the cleaning requirements, and the attendant consequences for failing to perform them, the consumer must affirmatively acknowledge having received and read the notice. Persons who knew or should have known their advertisement, display, or offer of a room rate was in violation of the law are subject to a civil penalty of up to $10,000. The Attorney General, district attorneys, city attorneys, and county counsel are authorized to prosecute such actions.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

Cost pressures (Trial Court Trust Fund, General Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.

SUPPORT: (Verified 8/18/24)

Consumer Federation of California

Consumer Watchdog

OPPOSITION: (Verified 8/18/24)

Airbnb

Booking Holdings

Expedia Group

Travel Technology Association

ARGUMENTS IN SUPPORT: The Consumer Federation of California and Consumer Watchdog write:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of “double paying,” which appears to be an unfair business practice under California law.

California’s consumers deserve greater transparency when it comes to what duties they are being asked to complete at short-term vacation rentals. AB 2202 will solve this issue by increasing transparency for consumers and requiring that all cleaning tasks that a renter is asked to complete before leaving a short-term vacation rental property be prominently disclosed prior to rental. It also will require that any penalty for not completing these tasks, including a drop in your guest review, be disclosed prior to booking.

ARGUMENTS IN OPPOSITION: The coalition, including Expedia Group, write:

We urge the committee to make the following amendments:

• Differentiate between the responsibilities of the short-term rental host and the short-term rental platforms;
• Clarify that the cleaning tasks are specific to those required of the traveler at check-out and the penalties associated if they do not perform those tasks;
• Clarify that this bill and the requirements associated would apply to California-based properties;
• Reduce the penalties for non-compliance from $10,000 per violation; and
• Change “short-term lodging” to “short-term rental” throughout to clarify that these only apply to short-term rental properties instead of the entire lodging industry.

ASSEMBLY FLOOR: 65-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gabriel, Gallagher, Holden, Mathis, Joe Patterson, Luz Rivas, Sanchez, Wilson

Prepared by: Christian Kurpiewski / JUD. / (916) 651-4113

8/19/24 12:35:50

**** END ****

1. The Economics of Drip Pricing, FTC, https://www.ftc.gov/news-events/events/2012/05/economics-drip-pricing. ↑

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2202 (Rendon) - Short-term rentals: disclosure: cleaning tasks

Bill Summary:

AB 2022 requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees and charges that will be added if a consumer fails to complete certain cleaning tasks and a description of those tasks, as provided.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 15, 2024

Fiscal Impact:

Cost pressures (Trial Court Trust Fund, General Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.

Author Amendments:

The amendments require a place of short-term lodging that advertises on a website or application to provide the notices in the advertisement. The amendments also make the bill operative on July 1, 2025.

Committee Amendments:

The amendments provide that the bill applies to advertisements and offers made in this state.

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2202 (Rendon) - Short-term rentals: disclosure: cleaning tasks

Bill Summary:

AB 2022 requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees and charges that will be added if a consumer fails to complete certain cleaning tasks and a description of those tasks, as provided.

Fiscal Impact:

Cost pressures (Trial Court Trust Fund, General Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund. The Governor’s 2024-25 budget proposes $83.1 million ongoing from the General Fund to backfill declining revenue to the Trial Court Trust Fund.

Background:

Existing law defines short-term lodging to mean any hotel, motel, bed and breakfast inn, or other transient lodging. The definition also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform. Existing law, enacted by AB 537 (Berman), Chapter 805, Statutes of 2023, prohibits, beginning July 1, 2024, a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, except government-imposed taxes and fees. However, all taxes and fees imposed by a government must be included in the total price to be paid before the consumer reserves the stay. A violation of these requirements may result in a civil penalty not exceeding $10,000 for each violation.

Not included in the above transparency requirements is a requirement to disclose additional fees or penalties imposed on a consumer at the end of their stay for failure to perform specified cleaning responsibilities, such as emptying the trash or washing the dishes. These fees and penalties are typically charged by short-term vacation rentals, such as Airbnb, and are in addition to an upfront cleaning fee that is disclosed at the time of the reservation. In 2022, the median Airbnb upfront cleaning fee was $75 for a one-night stay.

Numerous articles and other sources suggest widespread consumer frustration with cleaning requirements imposed by short-term rentals (Airbnb and Vrbo, for example) that already charge an upfront cleaning fee and with the lack of disclosure of the cleaning requirements subject to additional fees or penalties.

Proposed Law:

This bill requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person, to provide a notice to consumers disclosing additional fees or charges that will be added to the total price, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay. The notice must include an explicit description of the cleaning tasks subject to the additional fees, charges, or penalties and must be affirmatively acknowledged by the consumer before the consumer reserves the stay.

The bill makes a violation of these provisions subject to civil enforcement actions by a city attorney, district attorney, county counsel, or the Attorney General and statutory civil penalties of up to $10,000 per violation. In addition, this bill:

• Defines “notice” as a written or electronic statement that is presented to the consumer in a specified font size. Specifies that affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
• Defines “penalty” as subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers, as specified.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 2202 (Author:Rendon)

Version: March 21, 2024

Hearing Date: June 18, 2024

Fiscal: Yes

Urgency: No

Consultant: CK

SUBJECT

Short-term rentals: disclosure: cleaning tasks

DIGEST

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees and charges that will be added if a consumer fails to complete certain cleaning tasks and a description of those tasks, as provided.

EXECUTIVE SUMMARY

The issue of “junk” fees and other pricing schemes gained more prominence nationally when President Joe Biden took aim at them in his State of the Union address in February 2023. There are various types of pricing and charging schemes generally deemed unfair or unlawful business practices. One growing industry for price opacity is in the short-term lodging industry with the most infamous hidden charge being the “resort fee.”

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees, charges, or other penalties that will be added if a consumer fails to complete certain cleaning tasks. The notice must also include a description of those tasks and be provided before the consumer reserves the stay. The bill subjects violations to public enforcement and civil penalties of up to $10,000 per violation.

The bill is author-sponsored. It is supported by the Consumer Federation of California and Consumer Watchdog. No timely opposition was received by the Committee.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Defines “short-term lodging” as any hotel, motel, bed and breakfast inn, or other transient lodging. It also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform whereby the rental is advertised, displayed, or offered and payments for the rental are processed. (Bus. & Prof. Code § 17568.6(b).)
2. Prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate, as defined, that does not include all fees or charges required to stay at the short-term lodging except taxes and fees imposed by a government on the stay. This applies to any advertising, display, or offer before the public in this state, or from this state before the public in any state. (Bus. & Prof. Code § 17568.6(a)(1).)
3. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include in the total price to be paid, before the consumer reserves the stay, all taxes and fees imposed by a government on the stay. (Bus. & Prof. Code § 17568.6(a)(2).)
4. Provides that a person that knew or should have known that it has advertised, displayed, or offered a room rate in violation of the above shall be subject to a civil penalty not exceeding $10,000 for each violation. An action to enforce this section may be brought by a city attorney, district attorney, county counsel, or the Attorney General. (Bus. & Prof. Code § 17568.6(e).)

This bill:

1. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include both of the following in a notice that is affirmatively acknowledged by the consumer, before the consumer reserves the stay:
   1. A disclosure of any additional fees or charges that will be added to the total price to be paid to stay at the short-term lodging, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay.
   2. An explicit description of the cleaning tasks subject to the additional fees, charges, or penalties described above.
2. Defines the following terms:
   1. “Notice” means a written or electronic statement that is presented to the consumer in a font size that is at least as large as the standard or default font size of the other text in the advertisement or that is displayed on the internet website, platform, application, or other centralized platform and requires that the consumer interact with the internet website, application, or platform to affirmatively acknowledge that they have read the notice. Affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
   2. “Penalty” means subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers including, but not limited to, designating or threatening to designate the consumer as a less favorable guest, decreasing or threatening to decrease the consumer’s status with or on the short-term lodging, internet website, application, or other similar centralized platform, or hindering or barring the consumer from reserving a stay at a place of short-term lodging that would otherwise be advertised or available to the consumer to view and reserve on the internet website, application, or platform.

COMMENTS

1. Pricing transparency

In his prepared speech for his 2023 State of the Union address, President Biden took aim at so-called “junk fees”:

My administration is also taking on “junk” fees, those hidden surcharges too many businesses use to make you pay more. For example, we’re making airlines show you the full ticket price upfront and refund your money if your flight is cancelled or delayed. We’ve reduced exorbitant bank overdraft fees, saving consumers more than $1 billion a year. We’re cutting credit card late fees by 75%, from $30 to $8. Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in. They add up to hundreds of dollars a month. They make it harder for you to pay the bills or afford that family trip.

I know how unfair it feels when a company overcharges you and gets away with it. Not anymore. We’ve written a bill to stop all that. It’s called the Junk Fee Prevention Act. We’ll ban surprise “resort fees” that hotels tack on to your bill. These fees can cost you up to $90 a night at hotels that aren’t even resorts. We’ll make cable internet and cellphone companies stop charging you up to $200 or more when you decide to switch to another provider. We’ll cap service fees on tickets to concerts and sporting events and make companies disclose all fees upfront. And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough – they can’t just treat your child like a piece of luggage.

Americans are tired of being played for suckers.^[1]

As part of its rulemaking, the FTC has made the case for why government action in response to these practices is critical to protecting consumers:

Junk fees impose substantial economic harms on consumers and impede the dissemination of important market information. A Commission analysis of hotel “resort fees” that were mandatory and undisclosed in the posted room rates concluded that such fees “artificially increas[e] the search costs and the cognitive costs” for consumers carrying out the transaction. Junk fees force consumers either to accept a higher actual price for a service or product after beginning the transaction or to spend more time searching for lower actual prices elsewhere. Consumers faced with such fees pay upward of twenty percent more than when the actual price was disclosed upfront. These fee practices can be found throughout the economy but appear to be particularly widespread in markets for travel such as hotels, room-sharing, car rentals, and cruises. Tickets for live events appear to be another market with widespread junk fees.^[2]

These fees artificially disrupt the balance of the market, resulting in “significant market misallocations.” “Because in a price-obscuring transaction consumers initiate purchasing decisions without knowing the actual cost, ‘[t]ickets will not necessarily go to the consumers who value them the most.’”^[3]

This troubling practice is particularly well-suited for government regulation as market participants are not best situated to refrain from such pricing practices if competitors are not held to account. The FTC conducted a workshop that “highlighted the inability of market participants to correct this course without intervention.” Case in point: “After a market leader took unilateral action to phase out hidden fees, the platform ‘lost significant market share and abandoned the policy after a year because consumers perceived the platform’s advertised prices to be higher than its competitors’ displayed prices.’”^[4]

1. Bringing pricing transparency to the short-term lodging industry

While the Biden Administration has clearly declared war with hidden fees at the federal level, a host of bills have been introduced, with some signed into law, in the California Legislature this session to combat these deceptive practices at the state level.

One bill, SB 425 (Dodd, Ch. 400, Stats. 2023) made it an unlawful business practice to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges, except as provided or exempted.

Another bill, AB 537 (Berman, Ch. 805, Stats. 2023), targeted short-term lodging. It specifically addressed the practice of offering certain rates that do not include all attendant fees and charges, commonly referred to as drip pricing. The Federal Trade Commission (FTC) defines drip pricing as a “pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process. The additional charges can be mandatory charges, such as hotel resort fees, or fees for optional upgrades and add-ons.”^[5]

This bill builds off of this law and targets the sometimes hidden cleaning fees associated with short-term rentals.

According to the author:

Transparency helps California’s consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, as opposed to upon arrival at the vacation home, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to provide consumers a clear notice before the consumer reserves the stay. The notice must disclose any additional fees, charges, or penalties that will be added or imposed if the consumer does not complete certain cleaning tasks at the end of the stay. The notice must also include an explicit description of what those cleaning tasks are. To ensure the consumer is adequately warned of the cleaning requirements, and the attendant consequences for failing to perform them, the consumer must affirmatively acknowledge having received and read the notice.

As it adds to the statute established by AB 537, persons who knew or should have known their advertisement, display, or offer of a room rate was in violation of the law are subject to a civil penalty of up to $10,000. The Attorney General, district attorneys, city attorneys, and county counsel are authorized to prosecute such actions.

The Consumer Federation of California and Consumer Watchdog write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of “double paying,” which appears to be an unfair business practice under California law.

California’s consumers deserve greater transparency when it comes to what duties they are being asked to complete at short-term vacation rentals. AB 2202 will solve this issue by increasing transparency for consumers and requiring that all cleaning tasks that a renter is asked to complete before leaving a short-term vacation rental property be prominently disclosed prior to rental. It also will require that any penalty for not completing these tasks, including a drop in your guest review, be disclosed prior to booking.

SUPPORT

Consumer Federation of California

Consumer Watchdog

OPPOSITION

Airbnb

Booking Holdings

Expedia Group

Travel Technology Association

RELATED LEGISLATION

Pending Legislation: SB 683 (Glazer, 2023) requires advertised rates for hotel rooms and short-term rentals to include all mandatory fees in their advertising and that hotels and short-term rentals provide clear pricing disclosures, all subject to public enforcement. SB 683 is currently on the Assembly Floor.

Prior Legislation:

SB 425 (Dodd, Ch. 400, Stats. 2023) See Comment 2.

AB 537 (Berman, Ch. 805, Stats. 2023) See Comment 2.

PRIOR VOTES:

Assembly Floor (Ayes 65, Noes 0)

Assembly Appropriations Committee (Ayes 13, Noes 1)

Assembly Business and Professions Committee (Ayes 16, Noes 1)

**************

1. Remarks of President Joe Biden – State of the Union Address as Prepared for Delivery (February 7, 2023) The White House Briefing Room, https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/. All internet citations are current as of June 12, 2024. ↑

2. Federal Register, Unfair or Deceptive Fees Trade Regulation Rule Commission Matter No. R207011 (November 8, 2022) FTC, https://www.govinfo.gov/content/pkg/FR-2022-11-08/pdf/2022-24326.pdf. ↑

3. Ibid. ↑

4. Ibid. ↑

5. The Economics of Drip Pricing, FTC, https://www.ftc.gov/news-events/events/2012/05/economics-drip-pricing. ↑

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 2202 (Author:Rendon)

Version: March 21, 2024

Hearing Date: June 18, 2024

Fiscal: Yes

Urgency: No

Consultant: CK

SUBJECT

Short-term rentals: disclosure: cleaning tasks

DIGEST

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees and charges that will be added if a consumer fails to complete certain cleaning tasks and a description of those tasks, as provided.

EXECUTIVE SUMMARY

The issue of “junk” fees and other pricing schemes gained more prominence nationally when President Joe Biden took aim at them in his State of the Union address in February 2023. There are various types of pricing and charging schemes generally deemed unfair or unlawful business practices. One growing industry for price opacity is in the short-term lodging industry with the most infamous hidden charge being the “resort fee.”

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to include specified disclosures in a notice to be affirmatively acknowledged by the consumer about additional fees, charges, or other penalties that will be added if a consumer fails to complete certain cleaning tasks. The notice must also include a description of those tasks and be provided before the consumer reserves the stay. The bill subjects violations to public enforcement and civil penalties of up to $10,000 per violation.

The bill is author-sponsored. It is supported by the Consumer Federation of California and Consumer Watchdog. No timely opposition was received by the Committee.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Defines “short-term lodging” as any hotel, motel, bed and breakfast inn, or other transient lodging. It also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform whereby the rental is advertised, displayed, or offered and payments for the rental are processed. (Bus. & Prof. Code § 17568.6(b).)
2. Prohibits a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate, as defined, that does not include all fees or charges required to stay at the short-term lodging except taxes and fees imposed by a government on the stay. This applies to any advertising, display, or offer before the public in this state, or from this state before the public in any state. (Bus. & Prof. Code § 17568.6(a)(1).)
3. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include in the total price to be paid, before the consumer reserves the stay, all taxes and fees imposed by a government on the stay. (Bus. & Prof. Code § 17568.6(a)(2).)
4. Provides that a person that knew or should have known that it has advertised, displayed, or offered a room rate in violation of the above shall be subject to a civil penalty not exceeding $10,000 for each violation. An action to enforce this section may be brought by a city attorney, district attorney, county counsel, or the Attorney General. (Bus. & Prof. Code § 17568.6(e).)

This bill:

1. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include both of the following in a notice that is affirmatively acknowledged by the consumer, before the consumer reserves the stay:
   1. A disclosure of any additional fees or charges that will be added to the total price to be paid to stay at the short-term lodging, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay.
   2. An explicit description of the cleaning tasks subject to the additional fees, charges, or penalties described above.
2. Defines the following terms:
   1. “Notice” means a written or electronic statement that is presented to the consumer in a font size that is at least as large as the standard or default font size of the other text in the advertisement or that is displayed on the internet website, platform, application, or other centralized platform and requires that the consumer interact with the internet website, application, or platform to affirmatively acknowledge that they have read the notice. Affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
   2. “Penalty” means subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers including, but not limited to, designating or threatening to designate the consumer as a less favorable guest, decreasing or threatening to decrease the consumer’s status with or on the short-term lodging, internet website, application, or other similar centralized platform, or hindering or barring the consumer from reserving a stay at a place of short-term lodging that would otherwise be advertised or available to the consumer to view and reserve on the internet website, application, or platform.

COMMENTS

1. Pricing transparency

In his prepared speech for his 2023 State of the Union address, President Biden took aim at so-called “junk fees”:

My administration is also taking on “junk” fees, those hidden surcharges too many businesses use to make you pay more. For example, we’re making airlines show you the full ticket price upfront and refund your money if your flight is cancelled or delayed. We’ve reduced exorbitant bank overdraft fees, saving consumers more than $1 billion a year. We’re cutting credit card late fees by 75%, from $30 to $8. Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in. They add up to hundreds of dollars a month. They make it harder for you to pay the bills or afford that family trip.

I know how unfair it feels when a company overcharges you and gets away with it. Not anymore. We’ve written a bill to stop all that. It’s called the Junk Fee Prevention Act. We’ll ban surprise “resort fees” that hotels tack on to your bill. These fees can cost you up to $90 a night at hotels that aren’t even resorts. We’ll make cable internet and cellphone companies stop charging you up to $200 or more when you decide to switch to another provider. We’ll cap service fees on tickets to concerts and sporting events and make companies disclose all fees upfront. And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough – they can’t just treat your child like a piece of luggage.

Americans are tired of being played for suckers.^[1]

As part of its rulemaking, the FTC has made the case for why government action in response to these practices is critical to protecting consumers:

Junk fees impose substantial economic harms on consumers and impede the dissemination of important market information. A Commission analysis of hotel “resort fees” that were mandatory and undisclosed in the posted room rates concluded that such fees “artificially increas[e] the search costs and the cognitive costs” for consumers carrying out the transaction. Junk fees force consumers either to accept a higher actual price for a service or product after beginning the transaction or to spend more time searching for lower actual prices elsewhere. Consumers faced with such fees pay upward of twenty percent more than when the actual price was disclosed upfront. These fee practices can be found throughout the economy but appear to be particularly widespread in markets for travel such as hotels, room-sharing, car rentals, and cruises. Tickets for live events appear to be another market with widespread junk fees.^[2]

These fees artificially disrupt the balance of the market, resulting in “significant market misallocations.” “Because in a price-obscuring transaction consumers initiate purchasing decisions without knowing the actual cost, ‘[t]ickets will not necessarily go to the consumers who value them the most.’”^[3]

This troubling practice is particularly well-suited for government regulation as market participants are not best situated to refrain from such pricing practices if competitors are not held to account. The FTC conducted a workshop that “highlighted the inability of market participants to correct this course without intervention.” Case in point: “After a market leader took unilateral action to phase out hidden fees, the platform ‘lost significant market share and abandoned the policy after a year because consumers perceived the platform’s advertised prices to be higher than its competitors’ displayed prices.’”^[4]

1. Bringing pricing transparency to the short-term lodging industry

While the Biden Administration has clearly declared war with hidden fees at the federal level, a host of bills have been introduced, with some signed into law, in the California Legislature this session to combat these deceptive practices at the state level.

One bill, SB 425 (Dodd, Ch. 400, Stats. 2023) made it an unlawful business practice to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges, except as provided or exempted.

Another bill, AB 537 (Berman, Ch. 805, Stats. 2023), targeted short-term lodging. It specifically addressed the practice of offering certain rates that do not include all attendant fees and charges, commonly referred to as drip pricing. The Federal Trade Commission (FTC) defines drip pricing as a “pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process. The additional charges can be mandatory charges, such as hotel resort fees, or fees for optional upgrades and add-ons.”^[5]

This bill builds off of this law and targets the sometimes hidden cleaning fees associated with short-term rentals.

According to the author:

Transparency helps California’s consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, as opposed to upon arrival at the vacation home, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

This bill requires a place of short-term lodging or an internet website, application, or other similar centralized online platform to provide consumers a clear notice before the consumer reserves the stay. The notice must disclose any additional fees, charges, or penalties that will be added or imposed if the consumer does not complete certain cleaning tasks at the end of the stay. The notice must also include an explicit description of what those cleaning tasks are. To ensure the consumer is adequately warned of the cleaning requirements, and the attendant consequences for failing to perform them, the consumer must affirmatively acknowledge having received and read the notice.

As it adds to the statute established by AB 537, persons who knew or should have known their advertisement, display, or offer of a room rate was in violation of the law are subject to a civil penalty of up to $10,000. The Attorney General, district attorneys, city attorneys, and county counsel are authorized to prosecute such actions.

The Consumer Federation of California and Consumer Watchdog write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of “double paying,” which appears to be an unfair business practice under California law.

California’s consumers deserve greater transparency when it comes to what duties they are being asked to complete at short-term vacation rentals. AB 2202 will solve this issue by increasing transparency for consumers and requiring that all cleaning tasks that a renter is asked to complete before leaving a short-term vacation rental property be prominently disclosed prior to rental. It also will require that any penalty for not completing these tasks, including a drop in your guest review, be disclosed prior to booking.

SUPPORT

Consumer Federation of California

Consumer Watchdog

OPPOSITION

None received

RELATED LEGISLATION

Pending Legislation: SB 683 (Glazer, 2023) requires advertised rates for hotel rooms and short-term rentals to include all mandatory fees in their advertising and that hotels and short-term rentals provide clear pricing disclosures, all subject to public enforcement. SB 683 is currently on the Assembly Floor.

Prior Legislation:

SB 425 (Dodd, Ch. 400, Stats. 2023) See Comment 2.

AB 537 (Berman, Ch. 805, Stats. 2023) See Comment 2.

PRIOR VOTES:

Assembly Floor (Ayes 65, Noes 0)

Assembly Appropriations Committee (Ayes 13, Noes 1)

Assembly Business and Professions Committee (Ayes 16, Noes 1)

**************

1. Remarks of President Joe Biden – State of the Union Address as Prepared for Delivery (February 7, 2023) The White House Briefing Room, https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/. All internet citations are current as of June 12, 2024. ↑

2. Federal Register, Unfair or Deceptive Fees Trade Regulation Rule Commission Matter No. R207011 (November 8, 2022) FTC, https://www.govinfo.gov/content/pkg/FR-2022-11-08/pdf/2022-24326.pdf. ↑

3. Ibid. ↑

4. Ibid. ↑

5. The Economics of Drip Pricing, FTC, https://www.ftc.gov/news-events/events/2012/05/economics-drip-pricing. ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2202

Author:(Rendon)

As Amended Ver:March 21, 2024

Majority vote

SUMMARY

Requires places of short-term lodging to disclose to consumers any cleaning tasks that guests will be required to complete to avoid an additional fee or penalty, such as a low guest rating.

Major Provisions

1. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include both of the following in a notice that is affirmatively acknowledged by the consumer, before the consumer reserves the stay:
   1. A disclosure of any additional fees or charges that will be added to the total price to be paid to stay at the short-term lodging, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay.
   2. An explicit description of the cleaning tasks subject to the additional fees, charges, or penalties.
2. Defines "notice" to mean a written or electronic statement that is presented to the consumer in a font size that is at least as large as the standard or default font size of the other text in the advertisement or that is displayed on the internet website, platform, application, or other centralized platform and requires that the consumer interact with the internet website, application, or platform to affirmatively acknowledge that they have read the notice. Affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
3. Defines "penalty" to mean subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers including, but not limited to, designating or threatening to designate the consumer as a less favorable guest, decreasing or threatening to decrease the consumer's status with or on the short-term lodging, internet website, application, or other similar centralized platform, or hindering or barring the consumer from reserving a stay at a place of short-term lodging that would otherwise be advertised or available to the consumer to view and reserve on the internet website, application, or platform.

COMMENTS

Numerous articles and social media posts suggest widespread consumer frustration with the cleaning requirements imposed by short-term rental (e.g. Airbnb and VRBO) hosts. While existing law requires price transparency for all short-term rentals, hotels, motels, and the like (collectively called short-term lodging), there is currently no requirement to disclose cleaning responsibilities (e.g. strip beds, take out the trash, vacuum, or start a load of laundry) that if left uncompleted would result in the guest having to pay a fee or risk being penalized by, for example, a low guest rating.

Guests' dissatisfaction stems in part from often having to complete specified chores in addition to paying a cleaning fee. In 2022, a NerdWallet analysis of 1,000 U.S. Airbnb reservations for a one-night stay with check-in dates in 2022 or 2023 revealed that 85% of listings included a cleaning fee, the median of which was $75. Moreover, the analysis found that cleaning fees accounted for roughly 25% of the total price per booking.

According to the author, Airbnb has endeavored to address guests' complaints by directing short-term rental owners to disclose cleaning requirements prior to booking. Upon review of several Airbnb listings, it appears that owners may disclose chores via the host's house rules, which are viewable at the bottom of the listing alongside safety information and the host's cancellation policy. When consumers press the "Request to book" or "Confirm and pay" button, they agree to the host's house rules, including any cleaning requirements. This committee is not aware of additional short-term rental sites requiring hosts to disclose guest cleaning requirements.

This bill would require the disclosure of any additional fees or charges that will be added to the total price of a stay at a place of short-term lodging, or any other penalty that will be imposed, if the consumer fails to complete certain cleaning tasks at the end of their stay. The disclosure is required to include a description of the cleaning tasks and be affirmatively acknowledged by the consumer before a reservation is made. According to the author's office, this bill would benefit all consumers, including those in vulnerable communities, by enabling consumers to more easily make informed decisions.

According to the Author

Transparency helps California's consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

Arguments in Support

The California Consumer Federation of California and Consumer Watchdog write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of "double paying," which appears to be an unfair business practice under California law.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, cost pressures (Trial Court Trust Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. This bill expands an existing cause of action that, beginning July 1, 2024, allows district attorneys, the AG, county counsels, and city attorneys to sue for violations of the broader statute requiring short-term lodging fee and charges disclosures. The existing statute and this bill apply generally to all short-term lodging establishments. However, as a practical matter, the additional disclosure requirements added by this bill will likely affect only short-term vacation rentals, such as those offered by Airbnb and Vrbo, and not hotels, motels, and bed and breakfasts, which typically do not require guests to perform cleaning tasks.

For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.  The Governor's 2024-25 budget proposes $83.1 million ongoing from the General Fund to backfill declining revenue to the Trial Court Trust Fund.

According to the Legislative Analyst's Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

VOTES

ASM BUSINESS AND PROFESSIONS: 16-1-1

YES: Berman, Flora, Alanis, Bains, Juan Carrillo, Chen, Grayson, Irwin, Jackson, Low, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Soria, Zbur

NO: Dixon

ABS, ABST OR NV: Sanchez

ASM APPROPRIATIONS: 13-1-1

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

NO: Dixon

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: March 21, 2024

CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0003052

Date of Hearing: April 10, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2202

Author:(Rendon) – As Amended Ver:March 21, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person, to provide a notice to consumers disclosing additional fees or charges that will be added to the total price, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay. The notice must include an explicit description of the cleaning tasks subject to the additional fees, charges, or penalties and must be affirmatively acknowledged by the consumer before the consumer reserves the stay.

The bill makes a violation of these provisions subject to existing statutory civil penalties and enforcement actions for short-term lodging fee disclosure violations.

In addition, this bill:

1. Defines “notice” to mean a written or electronic statement that is presented to the consumer in a specified font size. Specifies that affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
2. Defines “penalty” to mean subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers, as specified.

FISCAL EFFECT:

Cost pressures (Trial Court Trust Fund) of an unknown amount, but potentially in the low- to mid-hundreds of thousands of dollars annually for trial courts to hear and adjudicate additional civil actions for alleged violations of short-term lodging disclosure requirements pursuant to this bill. This bill expands an existing cause of action that, beginning July 1, 2024, allows district attorneys, the AG, county counsels, and city attorneys to sue for violations of the broader statute requiring short-term lodging fee and charges disclosures. The existing statute and this bill apply generally to all short-term lodging establishments. However, as a practical matter, the additional disclosure requirements added by this bill will likely affect only short-term vacation rentals, such as those offered by Airbnb and Vrbo, and not hotels, motels, and bed and breakfasts, which typically do not require guests to perform cleaning tasks.

For context, if three cases are filed in civil court annually requiring seven to 10 days (56 to 80 hours) of court time, at an average cost per hour of $1,000 in workload costs, the cost to the trial courts would be between $168,000 and $240,000 annually. Actual costs would vary depending on the number of cases filed and the amount of court time required in each case.  Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund.  The Governor’s 2024-25 budget proposes $83.1 million ongoing from the General Fund to backfill declining revenue to the Trial Court Trust Fund.

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. 

COMMENTS:

1. Purpose. The author of this bill seeks to increase transparency for consumers booking short-term vacation rentals by requiring disclosure of additional cleaning obligations, and the associated fees and penalties for failure to perform these tasks, prior to a consumer booking the reservation. According to the author:

Transparency helps California’s consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

1. Background. Existing law defines short-term lodging to mean any hotel, motel, bed and breakfast inn, or other transient lodging. The definition also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform. Existing law, enacted by AB 537 (Berman), Chapter 805, Statutes of 2023, prohibits, beginning July 1, 2024, a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, except government-imposed taxes and fees. However, all taxes and fees imposed by a government must be included in the total price to be paid before the consumer reserves the stay. A violation of these requirements may result in a civil penalty not exceeding $10,000 for each violation.

Not included in the above transparency requirements is a requirement to disclose additional fees or penalties imposed on a consumer at the end of their stay for failure to perform specified cleaning responsibilities, such as emptying the trash or washing the dishes. These fees and penalties are typically charged by short-term vacation rentals, such as Airbnb, and are in addition to an upfront cleaning fee that is disclosed at the time of the reservation. In 2022, the median Airbnb upfront cleaning fee was $75 for a one-night stay.

Numerous articles and other sources suggest widespread consumer frustration with cleaning requirements imposed by short-term rentals (Airbnb and Vrbo, for example) that already charge an upfront cleaning fee and with the lack of disclosure of the cleaning requirements subject to additional fees or penalties.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 2, 2024

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 2202

Author:(Rendon) – As Amended Ver:March 21, 2024

SUBJECT: Short-term rentals: disclosure: cleaning tasks.

SUMMARY: Requires places of short-term lodging to disclose to consumers any cleaning tasks that guests will be required to complete to avoid an additional fee or penalty, such as a low guest rating.

EXISTING LAW:

1. Prohibits, beginning July 1, 2024, a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person from advertising, displaying, or offering a room rate, as defined, that does not include all fees or charges required to stay at the short-term lodging, except taxes and fees imposed by a government. (Business and Professions Code (BPC) § 17568.6)
2. Requires, beginning July 1, 2024, a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person, to include all taxes and fees imposed by a government in the total price to be paid before the consumer reserves the stay. (BPC § 17568.6)
3. Defines “short-term lodging” to mean any hotel, motel, bed and breakfast inn, or other transient lodging. “Short-term lodging” also includes a short-term rental, or a residential property that is rented to a visitor for 30 consecutive days or less through a centralized platform whereby the rental is advertised, displayed, or offered and payments for the rental are processed. (BPC § 17568.6)
4. Subjects a person that knew or should have known that it has advertised, displayed, or offered a room rate in violation of the restrictions and requirements above to a civil penalty not exceeding $10,000 for each violation. (BPC § 17568.6)

THIS BILL:

1. Requires a place of short-term lodging, an internet website, application, or other similar centralized platform, or any other person to include both of the following in a notice that is affirmatively acknowledged by the consumer, before the consumer reserves the stay:
   1. A disclosure of any additional fees or charges that will be added to the total price to be paid to stay at the short-term lodging, or other penalty that will be imposed, if the consumer fails to perform certain cleaning tasks at the end of the stay.
   2. An explicit description of the cleaning tasks subject to the additional fees, charges, or penalties.
2. Defines “notice” to mean a written or electronic statement that is presented to the consumer in a font size that is at least as large as the standard or default font size of the other text in the advertisement or that is displayed on the internet website, platform, application, or other centralized platform and requires that the consumer interact with the internet website, application, or platform to affirmatively acknowledge that they have read the notice. Affirmative acknowledgment may be accomplished by including a statement in the notice that the consumer acknowledges having read the notice before the internet website, application, or platform functions to allow the consumer to reserve the stay.
3. Defines “penalty” to mean subjecting a consumer to inferior terms, privileges, or conditions in comparison to other consumers including, but not limited to, designating or threatening to designate the consumer as a less favorable guest, decreasing or threatening to decrease the consumer’s status with or on the short-term lodging, internet website, application, or other similar centralized platform, or hindering or barring the consumer from reserving a stay at a place of short-term lodging that would otherwise be advertised or available to the consumer to view and reserve on the internet website, application, or platform.
4. Makes non-substantive and conforming changes.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is author-sponsored. According to the author:

Transparency helps California’s consumers make informed choices when it comes to short-term vacation rentals. Current California law requires that taxes and fees need to be outlined in advance to consumers. But cleaning requirements, meaning tasks they are asked to complete before they checkout, remain unclear and unregulated. By requiring that short-term vacation rentals disclose requested cleaning duties in advance, we can ensure consumers have the information they need to make a truly informed choice about their short-term vacation rentals.

Background.

Numerous articles and social media posts suggest widespread consumer frustration with the cleaning requirements imposed by short-term rental (e.g. Airbnb and VRBO) hosts.^[1] While existing law requires price transparency for all short-term rentals, hotels, motels, and the like (collectively called short-term lodging), there is currently no requirement to disclose cleaning responsibilities (e.g. strip beds, take out the trash, vacuum, or start a load of laundry) that if left uncompleted would result in the guest having to pay a fee or risk being penalized by, for example, a low guest rating.

Guests’ dissatisfaction stems in part from often having to complete specified chores in addition to paying a cleaning fee. In 2022, a NerdWallet analysis of 1,000 U.S. Airbnb reservations for a one-night stay with check-in dates in 2022 or 2023 revealed that 85 percent of listings included a cleaning fee, the median of which was $75.^[2] Moreover, the analysis found that cleaning fees accounted for roughly 25 percent of the total price per booking.

According to the author, Airbnb has endeavored to address guests’ complaints by directing short-term rental owners to disclose cleaning requirements prior to booking. Upon review of several Airbnb listings, it appears that owners may disclose chores via the host’s house rules, which are viewable at the bottom of the listing alongside safety information and the host’s cancellation policy. When consumers press the “Request to book” or “Confirm and pay” button, they agree to the host’s house rules, including any cleaning requirements.

This committee is not aware of additional short-term rental sites requiring hosts to disclose guest cleaning requirements.

This bill would require the disclosure of any additional fees or charges that will be added to the total price of a stay at a place of short-term lodging, or any other penalty that will be imposed, if the consumer fails to complete certain cleaning tasks at the end of their stay. The disclosure is required to include a description of the cleaning tasks and be affirmatively acknowledged by the consumer before a reservation is made. According to the author’s office, this bill would benefit all consumers, including those in vulnerable communities, by enabling consumers to more easily make informed decisions.

Current Related Legislation.

SB 1424 (Glazer) of 2024 requires a hosting platform, hotel, third-party booking service, or short-term rental to allow a reservation for a hotel accommodation or a short-term rental advertised in California to be canceled without penalty for at least 24 hours after the reservation is confirmed if the reservation is made 72 hours or more before the time of check-in. SB 1424 is pending in the Senate Judiciary Committee.

Prior Related Legislation.

AB 537 (Berman), Chapter 805, Statutes of 2023 prohibits, beginning July 1, 2024, a place of short-term lodging, as defined, from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, except government-imposed taxes and fees.

SB 644 (Glazer), Chapter 718, Statutes of 2023, requires a hosting platform, hotel, third-party booking service, or short-term rental to allow a consumer to cancel a reservation within 24 hours of making the reservation without penalty and to have the funds refunded to the original form of payment, if the reservation is made 72 hours or more before the time of check-in.

SB 683 (Glazer) of 2023 would require, beginning July 1, 2024, a person or an internet website, application, or other similar centralized platform that advertises a hotel room rate or short-term rental rate to include all mandatory fees in the advertised rental rate and include all government-imposed taxes and fees in the total price before the consumer reserves the stay. SB 683 is on the Assembly Inactive File.

SB 478 (Dodd) Chapter 400, Statutes of 2023, makes it an unlawful business practice under the Consumers Legal Remedies Act to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges, other than government-imposed taxes or fees.

AB 3235 (Chu) of 2020 was substantially similar AB 537 (Berman) of 2023. AB 3235 failed passage in the Assembly Business and Professions Committee.

ARGUMENTS IN SUPPORT:

The California Consumer Federation of California and Consumer Watchdog write in support:

Current legislation mandates the upfront disclosure of all taxes and fees associated with short-term vacation rentals once dates are selected. However, cleaning requirements, meaning the tasks consumers are often required to complete during their stay at a short-term vacation rental, remain largely unregulated. Many consumers have complained about booking vacation rentals, paying the required cleaning fees (which are often outrageous), and arriving at the rental only to find a laundry list of additional cleaning duties they must complete - duties not disclosed to them in advance. This system unduly burdens consumers and reeks of “double paying,” which appears to be an unfair business practice under California law.

ARGUMENTS IN OPPOSITION:

None on file.

REGISTERED SUPPORT:

Consumer Federation of California

Consumer Watchdog

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Kaitlin Curry / B. & P. / (916) 319-3301

1. Airbnb Host Giving Guests 'Chores List' on Top of $165 Cleaning Fee Slammed; Welcome to Your Airbnb, the Cleaning Fees Are $143 and You’ll Still Have to Wash the Linens ↑

2. Airbnb Has a Plan to Fix Cleaning Fees ↑