Loftium, a Seattle-based Airbnb rental startup, has been facing a class-action lawsuit since 2020. The lawsuit alleges that Loftium breached its contract with homeowners by failing to pay rent on time and in full, and by damaging their homes.
The lawsuit also alleges that Loftium misled homeowners about the risks of its program. Loftium claims that its program can help homeowners earn passive income and build equity in their homes, but the lawsuit alleges that Loftium’s program is actually a “predatory lending scheme” that traps homeowners in debt.
The lawsuit is still ongoing, but it has already had a significant impact on Loftium. The company has been forced to lay off staff and reduce its operations. It has also been the subject of numerous negative media reports.
FAQs:
What is Loftium?
Loftium is a Seattle-based Airbnb rental startup that rents homes from homeowners and subleases them to tenants who then manage them as Airbnbs.
Why is Loftium being sued?
Loftium is being sued for breach of contract and fraud. The lawsuit alleges that Loftium failed to pay rent on time and in full to homeowners, damaged their homes, and misled them about the risks of its program.
What is the status of the lawsuit?
The lawsuit is still ongoing.
What should homeowners do if they are considering working with Loftium?
Homeowners should carefully review Loftium’s terms of service and speak to an attorney before signing any contracts.
What are the risks of working with Loftium?
The lawsuit alleges that homeowners who work with Loftium risk losing money, having their homes damaged, and being sued by their tenants.
What are the alternatives to working with Loftium?
Homeowners who want to rent out their homes can do so directly or through a traditional property manager.
Conclusion
The Loftium lawsuit is a reminder that homeowners should carefully consider the risks of working with any company that promises to help them earn passive income from their homes. Homeowners should always review the terms of service carefully and speak to an attorney before signing any contracts.
Additional FAQs:
How much does Loftium charge homeowners?
Loftium charges homeowners a 2% management fee and 50% of the Airbnb revenue.
What happens if my home is damaged while Loftium is renting it out?
Loftium has a $1 million insurance policy to cover damage to homes, but the lawsuit alleges that Loftium has been slow to file claims and pay out homeowners.
Can I terminate my contract with Loftium early?
Yes, but you may be charged a penalty fee.
What if I have a dispute with Loftium?
All disputes between Loftium and homeowners must be arbitrated in Seattle, Washington.
Is Loftium a scam?
The Loftium lawsuit alleges that Loftium is a “predatory lending scheme.” However, Loftium claims that its program is a legitimate way for homeowners to earn passive income and build equity in their homes.
References:
- Seattle-based Airbnb rental startup Loftium misses its own rent payments, slashes staff as coronavirus undercuts business: https://www.seattletimes.com/business/real-estate/seattle-based-airbnb-rental-startup-loftium-misses-its-own-rent-payments-slashes-staff-as-coronavirus-undercuts-business/
- Loftium – AirBNB arbitrage gone wrong: https://www.biggerpockets.com/forums/530/topics/844484-loftium-airbnb-arbitrage-gone-wrong
- Terms of Service | Loftium: https://loftium.com/terms_of_service