Tenants turned property manager via Airbnb

Posted by
on Aug 26, 2014

Airbnb has grown into an idea of epic proportions.

A website that was once used for couch surfing wonders is now a worldwide short-term rental facilitator. Why pay excessive amounts of money for a hotel when you can pay half the price and stay at someone’s home or leave your apartment empty while you’re away for a week when you could have someone pay you to stay in it?

The website has fast become a popular alternative to booking a hotel when travelling. On one hand, it’s a great way to find accommodation without the cost of booking expensive hotels, however, renters are jumping on board and effectively ‘sub-letting’ their homes to pay their rent and (in some cases) make a profit without informing their property manager or landlord.

Not only is this breaking the lease terms (in most cases), but raises issues such as insurance validation if something happens to the property, apartment security breaches and the amount of wear and tear a property withstands. Renters aren’t the only ones taking advantage, with people buying properties purely to rent through Airbnb to avoid taxes and make substantial profits on their investments, rather than leasing them out as ‘holiday rentals’ or finding tenants to sign a lease.

Is this illegal? Potentially!

Airbnb takes the stance that it is the users' responsibility to fully comply with their local laws, as well as ensure their lease conditions are not broken (if renters). The Australian reports, ‘The Tenants Union says you cannot sublet without the landlord’s written consent, however, the landlord cannot unreasonably withhold their consent’. It has also been reported that a third of New York City’s Airbnb properties are being rented in an illegal matter, and are effectively on the site as hotel rooms which does not comply with local law.

It could be that you are receiving complaints from neighbours or strata managers regarding high numbers of travellers traipsing luggage through the apartment block, your tenants asking for new keys as often as they change their undies or the wear and tear after an inspection is far more than expected, with more maintenance issues reported. Whatever the trigger to realising that your tenant is acting as a part-time property manager, you need to ensure that action is taken.

Contact your landlord to ensure that they know what is occurring and how they would like to handle it. In most situations, a simple warning of the contract breach works and the tenant takes the listing off. However if the tenant denies what they are doing and you have evidence, further action may be required. If this is the case always seek legal advise, and ensure you keep all communication and evidence between all parties involved.

Due to the nature of the online community, these sorts of situations will keep appearing. And it’s only going to increase in Australia, with the recent appointment of an Aus/NZ Country Manager to help increase awareness of Airbnb in the region. So think about it as an opportunity to be aware. When taking on new tenants make it clear that their contract stipulates no subletting, and keep an eye out for warning signs that your tenants are playing part-time hotel tycoon.

If you’re a tenant, think twice before you pop your room up on the site and read your lease agreement thoroughly. The extra coin may not be worth potential out of pocket expenses if your insurance doesn’t cover damages made by an external person, or lease breaking issues with your property manager and landlord.