Airbnb room rental is subletting

Tuesday 28 August 2018

It has just got harder for tenants to justify renting out their accommodation on Airbnb – thanks to a new Tenancy Tribunal decision.

By Miriam Bell

The possibility of tenants subletting their rental properties, or parts of them, via short term rental services like Airbnb has been a growing concern for many landlords.

Several Tribunal decisions have come down hard on tenants who have moved out of their rental accommodation, then sublet it on Airbnb and pocketed sizeable profits.

But the situation was far less clear cut when it came to tenants renting out rooms in their rental properties on Airbnb.

Now the Tribunal has provided some guidance on the matter with the release of a decision which finds some South Auckland tenants breached their tenancy agreement by renting a room on Airbnb.

The tenants rented out a room in the Dannemora house for several months before the landlord’s insurance company alerted the landlord to the situation.

While the tenancy agreement specified that subletting was not allowed, the tenants argued that because they were not making the whole of the premises available to guests they were not subleasing.

However, the Tribunal was satisfied that the tenants hosting Airbnb guests in the property and giving them exclusive rights to possession and occupation of parts of the property qualified as subleasing.

That meant it found the subleasing of a room in the property was a clear breach of both the Residential Tenancies Act and the tenancy agreement.

The tenants were ordered to pay the landlord $1222.94 in compensation.

But, because they had removed the property from Airbnb as soon as they were served a notice to remedy, the Tribunal did not agree to the landlord’s request to terminate the tenancy.

In the past, tenancy experts have said that renting out a spare room on Airbnb does not qualify as subletting.

Tenancy.co.nz director Scotney Williams says the decision flies in the face of what he had thought as it is generally accepted that tenants are entitled to do some business at their place of residence.

The law is vague about how much business tenants can do but he thought that principle would have covered renting out a spare room in a rental property, he says.

“In this case, the Tribunal must have decided that using rooms for Airbnb is unsatisfactory in terms of a tenant’s business.

“It’s a very clear signal that the Tribunal does not consider letting rooms on Airbnb is acceptable for tenants.”

Williams says that if a landlord wants to prevent their tenants putting their rental property on services like Airbnb, they need to include an explicit “no sub-letting” clause in their tenancy agreement.

Further, that clause should be as specific as possible so that tenants are clear about what they can and can’t do, he adds.

Read more:

Airbnb profits for landlord not tenant 

Airbnb breaches RTA – Tribunal 

Comments from our readers

No comments yet

Sign In / Register to add your comment

Property News

Has the sun set on holiday rentals?

With all the talk of increased council rates and compliance for short term rentals, do they still make investment sense? This month NZ Property Investor magazine investigates.

House Prices

New record for Wellington prices

Wellington asking prices hit a new high in November – for the third month in a row, according to new Trade Me Property data.

Commercial

Growth in NZ demand for co-working space

Developing co-working and flexible spaces in commercial properties offers big opportunities for landlords, the results of a major new survey suggest.

Mortgages

LVR easing will prompt modest growth

Don’t expect the housing market to take off at a runaway pace following the Reserve Bank’s announcement that the LVR restrictions will be eased from early next year.

Site by PHP Developer