A.

Obligations and Liabilities of a Host

Essentially, accommodation-sharing transactions are made possible through lease

agreements on a short-term basis between hosts and guests for a rental fee. However, in the

previous chapter, it is argued that both ordinary and professional hosts are engaged, to an extent,

in an accommodation establishment business. Ordinary hosts that are engaged in small-scale

accommodation-sharing, i.e. offering single properties for short-term rentals, are found to be

more akin to homestay operators, which are tourist-related establishments accredited by the

DOT. Professional hosts that offer multiple properties are more similar to hotels or other

accommodation establishments.

With that, it can be gleaned that accommodation-sharing hosts possess both

characteristics of lessors and innkeepers. Hosts are not mere lessors but they are also engaged in

accommodation establishment business that affects public interest. Consequently, as a lessor, the

hosts’ duties and liabilities can be determined under existing provisions on lease in the Civil

Code. Since hosts are found to be akin to innkeepers as well, the proponent argues that these

hosts should exercise the same degree of diligence and answer to the same extent of liabilities

required of hotels, innkeepers or other accommodation establishments. Therefore, this section

evaluates the intersection among the existing laws applicable to mere lease contracts and those

laws that govern hotels and other accommodation establishments, and the application of some

provisions to accommodation-sharing transactions.

1. Duties, Obligations and Liabilities of Hosts

(a) Duty to deliver property

 First, the host is obliged to deliver to the host the possession of the space or property to

be rented, in a condition that is fit for the purpose intended.1 The host has to ensure that the

property is not in possession of somebody else for the agreed period of lease, as booked by the

guest through the online accommodation-sharing platforms. It must be guaranteed that there are

no conflicting bookings on the property to be rented. Otherwise, there is a breach of contract on

the part of the hosts, hence giving the guest a cause of action against the host. Furthermore, the

condition of the space has to be fit for rental purposes. Nevertheless, the fitness of the space to be

rented may also be waived by contrary stipulation of the parties.2 This lessor’s duty to deliver the

property fit and suitable for short-term rental purposes is also in line with the lessor’s implied

warranty against hidden defects and encumbrances in delivering the property leased, as

mandated under the Civil Code and the Consumer Act.3

(b) Duty to repair property

Second, the host has the duty to make all the necessary repairs to keep the space or

property suitable for the purpose to which it has been devoted, unless there is a contrary

stipulation.4 This means that the host has the obligation to keep his property safe and suitable for

rental purposes of the guest, unless the host and the guest agreed otherwise. But this contrary

stipulation to this duty of the host is unlikely in accommodation-sharing transactions since most

of the guests here are transient and they typically rent the properties of the hosts on a short-term

basis.

(c) Duty to maintain peaceful and adequate enjoyment of property and duty to

provide basic adequate security over the property

1 CIVIL CODE, art. 1643

2 PARAS, at 361.
3 CIVIL CODE, art. 1561-1581; See also Consumer Act, art. 67
4 CIVIL CODE, art. 1643
 Third, hosts must also maintain the guest in the peaceful and adequate enjoyment of the

property to be rented for the whole period booked by the guest. 5 Correlative to this duty is the

implied warranty against eviction, 6 because a necessary condition of the enjoyment of the

property is the guest’s possession of the leased property.7 Without possession of the premises,

there can be no enjoyment.8

This legal duty of a lessor to ensure the lessee’s peaceful and adequate enjoyment of the

leased property is crucial in determining the accommodation-sharing hosts’ liabilities, since a

lessor is not liable for all acts of trespass of third persons in their properties. The law and

jurisprudence emphasizes the difference between the two types of acts of trespass, i.e. trespass in

law and trespass in fact, because the type of trespass is determinative of the lessor’s liability to

lessees.

The Civil Code provides that lessors shall only be liable for trespass of third persons who

have legal rights or claims and not for trespass of persons who claim no right or whatsoever,

where in such case the aggrieved guests shall only have direct remedies against the intruders. 9

Trespass in fact includes all acts of trespass of third persons without any legal basis, while

trespass in law involves acts of trespass based on legal rights or claims.10 According to Paras, the

“peaceful and adequate enjoyment” refers to the legal, not physical possession, of the property. 11

This means that a lessor may not be liable to the lessees for the disturbances in the neighborhood,

but may be liable if the lessee is evicted due to the lessor’s nonpayment of the taxes of the

5 CIVIL CODE, art. 1643

6 CIVIL CODE, art. 1548 to 1561.
7 34 Phil. 562, 565
8 34 Phil. 562, 565
9 Civil Code, art. 1664
10 34 Phil. 562, 567
11 PARAS, at 362
property rented.12 It also necessarily implies a lower degree of diligence on the part of the lessors

in maintaining the security of the premises. The lessor only has to ensure that no other third

person claims right of possession or ownership over the property leased. But a lessor would not

be subsidiarily liable for the death, robbery, theft or other cases of trespass in fact that occurs

against the lessees and their use of the lessor’s premises during the lease.13

If accommodation-sharing hosts would merely be considered as mere lessors, then the

right of guests to consumer protection would be compromised. This is because treating hosts as

mere lessors would mean requiring them to exercise a lower degree of diligence, since they are

not answerable for mere acts of trespass of third persons who have no legal right or claims. Host

would not be required to ensure the security of the premises against mere disturbances within the

vicinity. Necessarily, hosts would also not be liable for mere acts of trespass of third persons to

their properties, even during the period that guests booked their properties for short-term rental.

If guests become victims of robbery or theft or incur other damages and injuries arising from the

accommodation-sharing agreement due to acts of third persons, the hosts are not answerable for

such damages, because in the first place, the hosts, as mere lessors, would also have no legal

obligation to provide adequate security over the premises to ensure the safety of the guests.

On the contrary, the proponent argues that, in the context of accommodation-sharing,

hosts shall be liable for both types of acts of trespass of third persons, since hosts are not mere

lessors but they are also engaged in an accommodation establishment business that is imbued

with public interest, similar to hotels or innkeepers. In other words, the proponent deems that

hosts shall be legally obliged not only to maintain the guests’ peaceful and adequate enjoyment

12 Heirs of Ormachea v. Cua Chee Gan and Co., C.A., 36 O.G. 3627
13 Goldstein v. Roces et. al http://www.lawphil.net/judjuris/juri1916/mar1916/gr_l-8697_1916.html
of property but must also have the legal duty to provide basic and adequate security over the

premises to ensure the safety of the consumer guests.

First, hosts shall be liable for acts of trespass in law, such as eviction of the guests, for

instance, due to the claim of the real owner over the property against the host. 14 This is based on

the host’s character as a lessor, who is liable for acts of legal trespass under the Civil Code.15

Second, hosts shall also be liable for acts of trespass in fact that causes damages to the property

or persons of guests, such as but not limited to robbery, theft and other disturbances, upon

showing that the hosts failed to exercise the required amount of diligence in securing the

premises leased by the guests from the hosts.

There are possible legal bases for making hosts answerable for acts of trespass in fact of

third persons. Primarily, the previous chapter argued that hosts are engaged in a type of

accommodation establishment business, similar to hotels or innkeepers. Thus, existing laws and

jurisprudence applicable to hotels and other accommodation establishments shall also apply to

hosts accordingly. One of which is the liability imposed on hotels, innkeepers or other

accommodation establishments under Articles 2000 to 2002 of the Civil Code on necessary

deposit, governing the required degree of care and diligence of hotels and other accommodation

establishments to the properties of their guest, as discussed in previous chapters. 16 A similar

provision under the Revised Penal Code also makes hotels or innkeepers subsidiarily liable for

damages for crimes committed in their premises, when persons criminally liable are unknown.17

Another basis to make hosts liable for acts of trespass in fact of third persons is to

analogously apply to hosts the case of Makati Shangri-La Hotel And Resort, Inc. v. Harper et. al,

14 Pascual v. Bautista, et al., C.A., L-7878-F, Feb. 16, 1953

15 CIVIL CODE, art. 1664.
16 CIVIL CODE, art. 2000-4.
17 Revised Penal Code, art. 102, ¶ (1)
which held the hotel civilly liable for damages for the hotel’s negligence in failing to provide

basic and adequate security measures in each hotel floor expected of a five-star hotel, which

becomes the proximate cause of the murder of the guest inside his hotel room.18 The Court, in

ruling that the hotel was liable for quasi-delict due to its negligence in failing to secure the life

and safety of its guest, applied by analogy the degree of diligence and care required of hotels as

to the personal effects and properties of their guests.19 The Court also took into account that an

individual who registers as a guest of a hotel, to an extent, expects the establishment to be the

guardian of his life and his personal belongings during his stay.20

Essentially, applying these Civil Code provisions on necessary deposit and

jurisprudential doctrine to hosts would also impose a legal duty for hosts to provide basic and

adequate security measures to ensure the safety of both the persons and personal properties of the

guests. This implies that the hosts shall be liable for the loss or damages to the personal

properties of the guests, whether it is caused by the acts of the strangers or hosts’ employees,

provided that the guests gave the hosts prior notice on the properties they brought, and the guests

followed the prescribed precautions given by the hosts. But hosts shall not be liable for robbery,

theft and other crimes affecting the life and personal safety of the guests, if the act of the

criminal is done with the use of arms or through an irresistible force, since the law recognizes

these instances as force majeure, which exempts the hotels or innkeepers from liability.21

However, the proponent acknowledges that the degree of diligence required of hosts may

also vary from case-to-case, since the nature of the services, facilities and amenities that hosts

provide are also diverse. Nevertheless, it is important to note that the online platforms’

18 Makati Shangri-La Hotel And Resort, Inc. v. Harper et. al, 679 SCRA 444.
19 Makati Shangri-La Hotel And Resort, Inc. v. Harper et. al, 679 SCRA 444, 478.
20 Makati Shangri-La Hotel And Resort, Inc. v. Harper et. al, 679 SCRA 444, 472.
21 CIVIL CODE, art. 2001.
packaging or branding of the accommodation-sharing services of the hosts as trustworthy, safe

and secured is also crucial in determining the hosts’ liabilities. For instance, Airbnb provides that

a member is “verified,” 22 or Airbnb may offer hosts to have their photos “verified” by its

professional photographers.23 Although Airbnb denies in its Terms that these “verifications” are

not guarantees of the trustworthiness, safety or suitability of these hosts, including their identity

or background,24 these are still highly influence the guests’ reliance on the safety and security of

the accommodation-sharing services of the hosts. Therefore, this reliance of the guests to both

hosts and Airbnb further justifies the imposition of liability to hosts for the acts of trespass in fact

of third persons, depending on the degree of diligence exercised by both the hosts and the guests.

Again, the proponent deems that hosts have the legal duties to first, preserve the guests’

peaceful and adequate enjoyment of the property leased and second to provide basic and

adequate security therein. Hence, failure of the hosts to fulfill these two legal duties should make

them liable for the resulting damages to the guests, but taking into account the diligence

exercised by the hosts.

2. Taxes, Licensing, Sanitary, Fire and Structural Safety Regulations

Similar with other legitimate and accredited accommodation establishments,

accommodation-sharing hosts facilitated by services of online platforms must also procure

license or permits prior to operating. Primarily, hosts have to be accredited and be certified by

the DOT. Obtaining permits to operate from the local government units that have jurisdiction

over these accommodation establishments may also be required. Sanitary and fire safety permits,

among others, that ensure the hosts’ compliance with the Sanitation Code and the Revised Fire

22 https://www.airbnb.com/terms, § 1.3
23 https://www.airbnb.com/terms, § 5.6
24 https://www.airbnb.com/terms, § 1.3
Code, respectively, must also be secured by hosts before listing their properties for rent through

the online platforms.

These legal duties are currently being fulfilled by existing hotels and other accredited

accommodation establishments, to guarantee the right of consumers to consumer protection,

pursuant to the mandate of the Constitution and the Consumer Act. Accommodation-sharing

hosts that utilize online platforms to list their home or vacation rental services are engaged in

lease transactions on a more frequent manner than traditional lease contracts that lasts for a

longer period. In effect, the hosts’ frequent offering of accommodation-sharing services on a

short-term basis already amounts to more than entering into private contractual relations with

their guests. The hosts’ regular use of the online platforms to list their properties for short-term

rentals and reach consumers further converts the nature of a accommodation-sharing transaction

from being a mere private contract into a commercial activity or business that is imbued with

public interest. Hence, it is only but just for hosts to equally comply with the duties to procure

licenses and permits prior to operating their businesses, just like other legitimate accommodation

establishments fulfill.

3. Zoning Regulations and Homeowners or Condominium Association’s Rules

Relevant to operating accommodation and other tourist-related establishments is

compliance to zoning regulations that are being ignored by most hosts now in engaging in

accommodation-sharing transactions. In Philippines, local government units are authorized to

enact zoning ordinances, for purposes of comprehensive planning of use of land and its

resources, taking into account factors such as food production, human settlements and industrial
activities.25 These ordinances are subject to existing laws, regulations and established fire limits

and zones.26

Aside from zoning ordinances, hosts, particularly those offering spaces or rooms for

accommodation-sharing located in condominiums, also ought to ensure that that they are not

violating any rules and regulations issued by the condominium associations. This is to prevent

instances of eviction of guests, in case hosts are found to be engaging in prohibited activities in

their areas.

Some condominium associations prohibit such short-term rentals for purposes of ensuring

the condominium residents’ safety and security, because the security of the place is disturbed by

the constant arrival and departure of transient guests who are total strangers. Furthermore,

prohibiting accommodation-sharing practice would limit the potential risk of liability of these

condominiums for damages arising from the injuries to the persons and property of the guests.

But these rules, in effect, restrict the unit owner’s right to lease his property. Initially, the rules

and regulations of these associations prohibiting short-term rentals to transient guests may create

another legal question as to whether these associations have the legal authority to impose such

restrictions, or whether these rules infringe on the condominium unit owner’s property right.

Nevertheless, the proponent concludes that the condominium associations have the

authority to restrict the host’s accommodation-sharing practices in his condominium unit. The

Condominium Act permits a condominium corporation to state in the master deed of the

condominium the purposes for which the building and the units are intended or restricted as to

use.27 Moreover, any reasonable restriction on the right of any condominium owner to alienate or

25 Local Government Code, § 20, ¶ (c).

26 Local Government Code, § 447, ¶ (a)(2)(ix).
27 Condominium Act, § 4, ¶ (e).
dispose of his unit that is not contrary to the morals or public policy must be attached as integral

part of the master deed.28

Regulation of online platforms may come in the form of subjecting them to intermediary

liability, upon their failure to comply with the minimum standards, conditions or legal duties that

the regulating law may provide. But their intermediary liability should not be based on the

damages or harms that may arise from the accommodation-sharing transactions between the

hosts and the guests,29 since, as mentioned, the online platforms are not entirely liable based on

the existing principles of contract law and tort law in Philippines. The overall conduct, degree of

control and participation of the online platforms in accommodation-sharing the do not fit the

elements of the existing legal frameworks to make them indirectly liable for the transactions of

the hosts. But the essential roles played by online platforms in the accommodation-sharing

services of hosts still justify the imposition of intermediary liabilities to them.

Unlike Internet service providers, which are passive intermediaries, online

accommodation-sharing platforms exercise some form and degree of control over the hosts’

transactions.30 These online platforms also have financial stake in the accommodation-sharing

transactions,31 since Airbnb, for example, earns by charging service fees to both hosts and guests

upon confirmation of the booking and reservations. These online platforms are likewise in a

position to aid the government in curbing illegal operators of accommodation establishments,

taking into account that online platforms are capable of processing the profiles and verifying the

identities of the hosts by requiring them to provide government identification cards.32

28 Condominium Act, § 4, ¶ (h).

29 Airbnb 8, Katz, at 1106.
30 Katz, at 1107.
31 Katz, at 1107.
32 https://www.airbnb.com/terms
 Online platforms also have programs that classify the hosts based on the quality of their

services, number of listings, and reviews given by their guests. For instance, Airbnb categorizes

certain hosts as “superhosts” and gives them a “profile badge,” upon garnering 5-stars for at least

80% of their reviews.33 If online platforms are able to rate the performance and service of hosts,

then they can presumably also detect those who are operating without the necessary license or

compliance with other government regulations. Nevertheless, the proponent acknowledges that

imposing legal duties and intermediary liabilities to online platforms is costly and tedious. 34

Thus, inclusion of the online platforms in the regulation of the accommodation-sharing practice

must consider due process elements in imposing affirmative duties and intermediary liabilities.

33 https://www.airbnb.com/superhost
34 Katz, at 1107.