The sudden popularity of AirBnB is unlikely to have escaped your notice. The principles are very simple. Any home with a room to spare, or accommodation that is temporarily vacated altogether, may be listed on the website and made available to so-called “guests” in return for rent (for typically up to 90 days in London, other restrictions may apply elsewhere).
If you are a landlord yourself, a major worry might be your tenants deciding to list the accommodation they are renting from you on the AirBnB site – indeed, whether they even choose to tell you they are doing so.
You have every reason to worry – there is a lot that might go wrong:
- the rights of tenants to use and enjoy the accommodation they rent from you is restricted only by the terms of the tenancy agreement – and conditions either implied or expressed;
- as the landlord, the potential for doubt makes any reliance upon implied conditions and you might therefore want to ensure that the tenancy agreement is crystal clear about your tenant’s ability to sub-let, even on a temporary basis, through AirBnB;
- if the tenancy agreement stipulates that they must seek your permission every time they let to an AirBnB guest, but they fail to do so, or do so regardless of your having said “no”, they are then in breach of their tenancy agreement – and so expose themselves to the possibility of eviction;
- even where the tenancy agreement may grant your tenant the right to sublet on an AirBnB basis, you have reason to be worried about the “guests” your tenants may choose;
- there have been a number of horror stories in the press about AirBnB guests trashing accommodation let in this way, at the cost of very large repair bills and cleaning costs – there is even a constantly updated website, AirBnB Hell, dedicated to recording events when things go wrong;
- rogue AirBnB guests have been known to rent accommodation specifically to hold unruly parties, celebrations and illegal activities – including the use of drugs;
- in that event, it is unlikely you are going to be successful in making your tenant pay reparations and you are left with a very large repair and cleaning bill yourself;
- if an AirBnB host suffers an injury whilst staying in the accommodation rented by your tenant, or has any of their belongings damaged, they may claim for compensation from you as the landlord and owner of the property;
- there may be grounds for such a claim against the immediate AirBnB landlord, your tenant. But the chances of success are likely to be slender, your tenant is unlikely to have arranged the necessary landlords’ liability insurance, and this leaves you next in line for any such claims;
The Host Guarantee
- when seeking your permission to act as an AirBnB host, your tenant might point to the so-called Host Guarantee offered by the website, in respect of compensation for damage caused by guests – up to a seemingly generous £600,000;
- however, there are significant limitations, conditions and exclusions surrounding your tenant’s ability to claim for such physical losses;
- more to the point, though, is that any compensation through the Host Guarantee scheme is going to be paid to your tenant – and you may encounter significant difficulties in ensuring that your tenant uses any compensation to make the necessary repairs or pay any cleaning bill;
- those costs may far outweigh the amount of any deposit you have taken from the tenant at the start of the tenancy and held by a third party in accordance with the tenancy deposit protection scheme.
Your own tenants might be tempted to earn a little extra income by subletting their accommodation to AirBnB guests. In order to control that potentially damaging activity, the tenancy agreement needs to require your express approval – and, as the principal landlord, you are perfectly entitled to deny such permission, either in the tenancy agreement or at any time your permission is sought.