TITLE:

Accommodating The Accommodation-sharing Phenomenon in the Philippines: Determining

the Legal Relationships And Liabilities of Hosts and Online Platforms under Accommodation-
sharing Transactions

INTRODUCTION
1. Sharing Economy in General
2. Accommodation-sharing and History
3. Accommodation-sharing in Philippines
4. Operations of Online accommodation-sharing platforms
a. Insurance
b. Review or Rating system
c. Payment
d. Dispute Resolution
5. Advantages of Accommodation-sharing
6. Problems of Accommodation-sharing
a. Horror Stories about Airbnb accommodation-sharing
b. Online accommodation-sharing companies, just like other companies operating
under sharing economy, are shifting liabilities and risks to independent contractors or
service providers, consumer public and third persons.
c. Commercial/Professional and Ordinary accommodation-sharing hosts
7. Significance of the Study
a. Courts can always look into the overall conduct of the parties in ascertaining the true
legal relationships between them
b. Prevent proliferation of illegal hotels
c. Give the consumer public appropriate remedies, pursuant to mandate of the
Constitution and the Consumer Act to protect the interests of the consumers
d. Self-regulation is not enough
e. Insurance of online accommodation-sharing companies insufficient

LEGAL ISSUE/S
General legal issue:
Whether or not there is any law under Philippine legal system that squarely governs the
services that online accommodation-sharing platforms offer, together with the accommodation-
sharing hosts.

Specific legal issue:

1. Whether, and on what basis, online accommodation-sharing platforms can be held liable for
the actions, omissions, fault or negligence of the hosts.
a. Whether or not the service of online accommodation-sharing platforms is a lease, as
defined under Article 1643 the Civil Code.
i. Whether or not the online accommodation-sharing platforms are lessors.
b. Whether or not the service of hosts is a lease, as defined under Article 1643 the Civil
Code.
i. Whether or not hosts are lessors.
c. Whether or not an online accommodation-sharing platform is a principal or agent and
vice versa, broker, employer, insurer, partner or co-venturer of a host under
accommodation-sharing transactions.
 i. The Terms and Conditions of Service of online platforms, which constitute legally
binding agreements between the online platforms and the registered users,1
provide that the online platforms are neither agents, real estate brokers, insurers,
nor in any way parties to the contracts between hosts and guests.2
ii. A host is only treated as an independent contractor, not an agent, employee, co-
venturer or partner of the online platforms.3
iii. These contractual stipulations make it seem that the online platforms only serve
as booking platforms or tools for hosts and guests to communicate and transact
directly with each other,4 when in fact it plays essential roles other than merely
providing the platform services.5
iv. These are efforts of the online platforms to limit, exclude or avoid possible
liabilities that come with these traditional legal relationships, especially in case
injuries, damages to property, breach of contract and warranties result from
accommodation-sharing transactions

THESIS STATEMENT
Accommodation-sharing is a phenomenon where property owners offer their entire
accommodations or parts thereof for rent typically on a short-term basis through the facilitation
or use of online accommodation-sharing platforms.6 However, the legal treatment of
accommodation-sharing, as facilitated by online platforms, is not yet settled under the Philippine
legal system, particularly the issue on whether and on what legal basis, online accommodation-
sharing platforms can be held liable for the acts, omissions, fault or negligence of the hosts.

In answering this question, it is imperative to first establish, in Philippine context, the true nature
of the services of the online platforms and the hosts, their respective legal statuses, as well as
examine their legal relationship with the hosts, from the viewpoint of both the users or the
consumer public and third persons.

In other words, examining the nature of the services, the degree of control and extent of
participation of hosts and accommodation-sharing platforms in accommodation-sharing
transactions is determinative of the liabilities of both hosts and accommodation-sharing
platforms under such arrangement.

ANALYSIS
1. As to liability: Online accommodation-sharing platforms cannot be held liable under existing
legal frameworks in the Philippines, since its services is not yet contemplated by existing
legislation. There is absence of law that governs accommodation-sharing arrangements.
a. As to the service and legal status of online accommodation-sharing platforms

1 Airbnb, supra note 39.

2 Id.
3 Id. 1.4.
4 Airbnb, supra note 60.
5 See Federal Trade Commission Staff, supra note 15.
6 Maese, supra note 3, at 491.
 i. Online accommodation-sharing platforms are not offering lease services, as
defined under Article 1643 of the Civil Code; thus, online platforms could not
be deemed as lessors.
1. In the lease of things, one of the parties binds himself to give to
another the enjoyment or use of a thing for a price certain, and for a
period which may be definite or indefinite
a. First, online platforms do not own or do not have legal
possession of any unit, room, home or vacation property that
is necessary in lease contracts.
i. It is the hosts that own or have the legal possession of
these properties listed for rent through the online
platforms.
ii. It is the hosts that operate the accommodation-sharing
business.
b. Second, online platforms do not determine the price certain for
the lease of the units, rooms, homes or other properties.
c. Third, online platforms only earn through a percentage of the
rental fee or booking fee, depending on the policy of the online
platform.
i. For Airbnb, it earns from a percentage of both the
booking and rental fee.
ii. Price certain: the host do not receive the payment from
the
1. What is the consideration of host?
2. What is the consideration of host?
3. What is the consideration
iii. Booking
1. Online platforms are maintaining a certain
brand
a. Online travel agencies cannot or do not
decline
ii. Online accommodation-sharing platforms are not engaged in a hotel, inn or
other accommodation business, as contemplated by law and jurisprudence.
1. The case of Makati Shangri-la Hotel Inc., v. Harper provides that the
essence of hotel business involves providing both: (1) lodging or
accommodation services; and (2) security to the lives and properties
of guests.7
a. But online platforms do not own a property or asset that can
be utilized for conducting hotel business.
b. The business of online platforms does not involve the actual
offering of lodging services to the consumer public.
c. The online platforms do not own the properties, unlike with
hotels or other accommodation establishments that own the
rooms that guests occupy.
d. No direct accommodation services are offered to guests.

7 Makati Shangri-La Hotel And Resort, Inc., 679 SCRA at 478.

 iii. Online accommodation-sharing platforms are not travel agents. (See Jech
Tius thesis, p. 921)
1. Travel agents service is only the agencys service of arranging and
facilitating the booking, ticketing and accommodation in a package
tour.
a. To facilitate means to make a thing, process or action easier.
b. Travel agencies facilitate the acquisition of tickets and
accommodations.
c. Travel agents only perform limited acts and cease to play
particular roles after their delivery of travel documents to
clients.
i. But online platforms play essential roles.
ii. Airbnb has the power to decide whether or not to
refund the payment of guests within 24 hours, if the
guests complain.
2. Online travel agencies have authorities to bind either the hotel or the
consumer.
3. Online travel agencies only accredit legitimate and registered hotels,
motels, hostels and resorts.
iv. Online accommodation-sharing platforms are engaged in offering online
services that facilitate the lease or accommodation services of the hosts.
1. They do not have physical locations; they operate in a purely virtual
environment, unlike with traditional lessors or hotel businesses.
2. They hire independent contractors that undertake and deliver the
lease or accommodation services.
b. As to the services of the hosts:
i. The nature of the services of hosts falls under the minimum definition of
lease, since there is
ii. However, there are legal effects of lease contracts that are, arguably, not
present in accommodation-sharing transactions.
1. Legal possession is not given to the guests.
2. Eviction proceedings are not needed to evict guests
iii. There seems to be a lease contract between a host and a guest, but the
nature of their operations make it seem that they are engaged into something
more than mere lease agreements.
c. As to legal relationship with hosts:
i. Online accommodation-sharing platforms are not employers of hosts.
1. 4-fold test is not satisfied
2. no sufficient control
ii. Online accommodation-sharing platforms are not brokers between hosts and
guests.
1.
iii. Online accommodation-sharing platforms are not agents of hosts.
iv. Online accommodation-sharing platforms are not insurers of hosts and
guests.
v. Online accommodation-sharing platforms are not partners of hosts.
vi. Online accommodation-sharing platforms are not co-venturers of hosts.
vii. Online accommodation-sharing platforms are not cuentas en participation.
 1.
viii. Online accommodation-sharing platforms are engaged in an online business,
where hosts are independent contractors.
1. But online accommodation-sharing platforms play an essential role in
the whole accommodation-sharing arrangement or transactions.
2. Thus, it is imperative to examine the legal nature of the transaction
between hosts and guests.
d. As to the accommodation-sharing transaction between host and guest
i. The services that hosts offer fall under the minimum definition of lease under
Article 1643 of the Civil Code.
1. However, technology has allowed ordinary individuals to be hosts and
operate in a wider and more public and commercialized scale, to an
extent that places it outside the realm of ordinary lease contracts for
residential purposes.
2. The facilitation of online platforms has placed ordinary individuals to
grey area, to an extent that the consumer public, third persons or
other stakeholders, like the hoteliers, characterize hosts as illegal
hotel operators.

CONCLUSION
1. Online accommodation-sharing platforms are not offering lease services nor engaged in
hotel businesses, since they do not own properties or assets in delivering such services.
2. Although the transaction between hosts and guests under accommodation-sharing meet the
minimum definition of a lease agreement under Article 1643 of the Civil Code, some legal
effects of lease contracts are not present in accommodation-sharing transactions.
3. Therefore, online platforms and the participants must be understood in light of the basic
legal principles that existed before its rise and that there is something new and unique about
the legal regime that govern sharing economy transactions.
4. Existing legal regimes no longer squarely address the operations of online accommodation-
sharing platforms and their legal implications to the other participants to the transactions.
a. Before any person or entity may be held legally accountable for his acts or
omissions, his, her or its duty or obligation must first be clearly established.
b. Claims for liability by one party due to an act or omission of another must be
predicated on an obligation.
c. Obligations arise from law, contracts, quasi-contracts, acts or omissions
punished by law, and quasi-delicts.8
i. But online platforms could not be held liable under contract and tort law.
ii. Furthermore, there is currently no law that expressly governs the
obligations of hosts and online platforms.
d. Online platforms could not be held liable under contract law.
i. First, online platforms disclaim warranties, and exclude or limit their
liabilities for acts of hosts and guests, as provided in their Terms and
Conditions of Service
1. up to the maximum extent permitted by law
ii. Second, online platforms and hosts do not have the following defined
legal relationships: agency, employment, insurance, partnership and joint
venture.
e. Online platforms could not be held liable under tort law.
8 CIVIL CODE, article 1157.
 i. First, the doctrine of respondeat superior does not apply.
ii. Second, the doctrine of corporate negligence does not apply.
iii. Third, the doctrine of agency by estoppel
1. Estoppel should not be used to classify the legal relationship
between accommodation-sharing platforms and hosts.
f. Online platforms could be held liable for accrediting hosts that are not fit,
suitable, etc.
i. Own negligence
ii. This is not vicarious liability since there is no agency nor employment
relationship between hosts and online platforms, where vicarious liability
under the law may arise.9
g. Therefore, online platforms cannot be held liable for the acts, omissions, fault or
defined under Philippine legal system exists between them and the hosts.
h. But the proponent argues that online platforms may be held liable depending on
their extent of participation, control and derived benefit from the accommodation-
sharing transaction.
5. There is a need to enact a law that attaches liability on online accommodation-sharing
platforms, that would account for their own participation and commensurate to the
benefits they receive from the whole dynamics of their operations with the hosts.
a. The intermediary liability regime may be used to attach liability on online
accommodation-sharing platforms.

RECOMMENDATION
My recommendation addresses the liabilities of both the hosts and the online platforms. It is
two-pronged:
o (1) pre-operational measures;
o (2) operational measures; and
o (3) post-operational measures

1. Enact a law governing the liabilities of hosts and online platforms under accommodation-
sharing transactions
a. Scope
i. Includes unit, room, entire homes or vacation properties, all referred to here
as accommodation unit
ii. Expressly excludes rooms in a hotel, resort and apartment hotels, as defined
under the National Accommodation Standards issued by the Department of
Tourism, and other accommodation establishments, such as tourist inn,
pension house, motorist hotel, as defined under the 1992 Rules and
Regulations on the accreditation of hotels and other accommodation
establishments
b. Duties of Hosts
i. Accreditation of hosts to Department of Tourism
ii. Registration of hosts to their respective Local Government Units
1. Listing the number of their properties listed
iii. Liability for Property of Guest
1. No host is liable to make good to a guest loss of or injury to goods or
property brought to the accommodation unit, except if the goods or
property have been:

9 CIVIL CODE, arts. 2176 & 2180.

 a. stolen, lost or injured through the willful act, default or neglect
of the host or the hosts servant, or
b. deposited expressly for safe custody with the host, except that
in case of the deposit, the host may require as a condition of
liability that the goods or property be deposited in a box or
other receptacle, fastened and sealed by the person
depositing the goods or property.
2. If the vehicle of a guest has been delivered to the custody of the host
or the hosts servant expressly for storage or parking in a place
specifically reserved and designated by the host for the storing or
parking of vehicles, the liability of the host is that of a bailee for
reward.
3. If a host refuses to receive for safe custody, as mentioned, goods or
property of a guest, or if a guest, through a default of the host, is
unable to deposit the goods or property, the host is not entitled to the
benefit of this Act for the loss of or injury to the goods or property
unless the host proves that the host was not equipped with a proper
safe or vault or did not have a place for the storing or parking of
vehicles and that the host informed the guest at the time of refusing or
failing to receive the goods or property.
iv. Obligation to Provide Basic and Adequate Security
1. The DOT and LGUs must provide guidelines on what basic and
adequate security means on a particular city, province, region or
jurisdiction.
c. Duties of Online Accommodation-sharing Platforms
i. Liability for allowing illegal hosting of hosts
1. An online platform shall be held liable if a host engages in an
accommodation-sharing transaction through the online platform,
without prior DOT accreditation and licensing requirements from their
LGUs, where the online platform actively and knowingly participates,
facilitates and monitors the transactions between hosts and guests, to
the extent that the online platforms have control over the content and
data posted on their online platforms.
ii. Intermediary Liability of Online Platforms
1. Active Online Platforms
a. An online platform that actively participates, facilitates and
offers intermediary services to the accommodation-sharing
transactions of hosts and guests shall be liable for accrediting
persons or entities that are not eligible, suitable and fit to
deliver accommodation-sharing services.
b. These online platforms shall not allow persons or entities to
operate as accommodation-sharing hosts through the online
platforms, without the required DOT accreditation and
licensing from their respective LGUs.
2. Passive Online Platforms
a. An online platform shall not be held liable for the act of host in
engaging in an accommodation-sharing transaction through the
website or application of the online platform, without prior DOT
accreditation and licensing requirements from their LGUs, if the
 conduct and services offered by the online platform are merely
technical, automatic and passive.10
b. However, when such online platform benefits from the illegal
accommodation-sharing transactions of hosts, then the online
platform shall be held liable if the following circumstances concur:
i. the online platform has received a notice that a host
operates through the online platforms without the necessary
DOT accreditation and licensing requirements from their
LGUs;
ii. the online platform has the right and ability to control the
content and activities of the hosts in their websites or
applications; and
iii. the online platform fails to remove or deny access to the
profile of the host or the content posted by such host within
(72) hours.

o Hotel groups clamor that Airbnb, together with the rental services of hosts, is not
playing by the same rules,11 primarily, because Airbnb hosts generally do not pay
taxes for the rental income that they earn through accommodation-sharing. 12
Furthermore, they are not subject to the same sanitary, safety and security
regulations that hotel operators must follow.13

10 Id.
11 Katie Benner, Inside the Hotel Industrys Plan to Combat Airbnb, N.Y. TIMES, Apr. 16, 2017, available at
https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html
(last accessed July 14, 2017).
12 Id.
13 Id.
SIGNIFICANCE OF THE STUDY

The increasing popularity of the accommodation-sharing practice without determining their

legal classification becomes more pressing in terms of its implications on consumer
protection.14

1. What are the liabilities of the hosts and the accommodation-sharing platforms under
accommodation-sharing transactions in the Philippine legal system?
a. Host-Guest Relationship
i. Whether the laws on ordinary lease contracts under the Civil Code or laws
applicable to hotels, inns or other accommodation establishment operators
govern the relationship between hosts and guests.15
1. There is confusion on the legal character of hosts and guests. It is
ambiguous whether hosts are ordinary lessors or are more akin to
hotels, innkeepers or other accommodation establishment operators.
It is not settled whether accommodation-sharing guests are mere
lessees of ordinary lease contracts or are guests similar to those of
hotels, inns and other accommodation establishment operators.
b. Accommodation-sharing Platform
i. What is their legal status in Philippines?
c. Host-Accommodation=sharing Platform Relationship
i. The Terms of service of online platforms, which constitute legally binding
agreements between the online platforms and the registered users, 16 provide
that the online platforms are neither agents, real estate brokers, insurers, nor
in any way parties to the contracts between hosts and guests.17
ii. A host is only treated as an independent contractor, not an agent, employee,
co-venturer or partner of the online platforms.18
iii. These contractual stipulations make it seem that the online platforms only
serve as booking platforms or tools for hosts and guests to communicate and
transact directly with each other,19 when in fact it plays essential roles other
than merely providing the platform services.20
i. These are efforts of the online platforms to limit, exclude or avoid
possible liabilities that come with these traditional legal relationships,
especially in case injuries, damages to property, breach of contract and
warranties result from accommodation-sharing transactions

14 Id.
15 Maese, supra note 3 at 502-3.
16 Airbnb, supra note 39.
17 Id.
18 Id. 1.4.
19 Airbnb, supra note 60.
20 See Federal Trade Commission Staff, supra note 15.