Airbnb and rental properties-what are the problems for landlords?
With the on-set of popularity of on-line booking services for accommodation, such as Airbnb and Stayz, many managing agents are grappling with the issue of tenants in rental properties placing the property on short term holiday letting platforms without landlord or managing agent permission.
Whilst Airbnb says that it asks all hosts to certify they have permission to list their space and remind them to check and follow local rules before they list and throughout the year, it seems that many landlords are unaware that their tenants are offering the properties for short term leases.
Leasing out of the rental property by the tenant, called sub-letting, is a breach of the tenancy agreement if the landlord has not given their permission.
Landlords and managing agents express concerns about sub-letting such as:
- Noise issues, with many short-term tenants being on holidays and partying at the property
- Insurance - will normal landlord insurance cover an illegal sub-let situation if someone is injured at the property?
- No control over who has access to the property. In one case, the managing agent discovered a tenant was renting out an apartment on Airbnb while they were away on holidays. She was leaving keys in the mailbox for people to come and collect. This was a security issue for other occupants in the building, as well as the landlord, who had effectively lost control of who is in their property.
- Tenants making thousands of dollars a month by hosting short-term tenants, using the property to make money, rather than to live in themselves. This could equate to commercial use of a property zoned for residential purposes only.
Whilst the standard tenancy agreement specifies that sub-letting is not permitted without the written permission of the landlord, many managing agents are placing special conditions into their tenancy agreements which specifically outlaw placing short-term tenants in the rental property.
NSW fair Trading recently released some new Regulations surrounding short-term letting-with significant penalties of up to $1.1million for corporations and $220,000 for individuals.
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