I recently discovered that tenants in my rental property are currently advertising the property on Airbnb. Our agreement is very clear that there is to be no subletting. At first, I wasn’t sure if they were very active in promoting it on Airbnb. I now have been able to confirm that they are regularly booking out the property to Airbnb guests at the weekends and during the summer. We’ve never had any issues with these tenants, but we do not want the Airbnb subletting to continue. What is the best way to approach this with them?
In my view, writes Kersten Mehl, the best approach is to terminate their tenancy on the following basis:
a) They have used the property for commercial purposes.
b) Their actions would probably invalidate your insurance.
c) They cannot assign or sublet without the landlord’s written consent.
d) They are obliged not to do anything that would cause the landlord to breach their legal obligations in relation to the dwelling tenancy.
e) They have not informed the landlord in writing of the identity of all the occupants of the property.
This is by no means an exhaustive list of breaches of their tenancy but I thought it useful to highlight the key issues before going into more detail about the implications of your tenants’ actions by putting your property on Airbnb.
Airbnb
This is not subletting in the sense of the word: one tenant is replacing another and you are informed or not. Airbnb is a commercial platform. In its conception Airbnb was offering a platform for owner-occupiers to let out surplus space in their home, ideally for those on short-term business trips or holidays. Accordingly, there would be a commercial benefit for those availing of this service.
In reality, this whole concept has been, to a certain extent, highjacked by property investors who have bought multiple properties and used the Airbnb platform to generate income. In Ireland, continuous penal restrictions imposed on Irish residential property investors has, in my view, pushed many of them to avail of these platforms in order to avoid those restrictions. There is no question that this has had an impact on supply of property in the Irish rental market. The Government has moved to address this issue, passing legislation in the past month which stated that residential properties that are non-owner-occupier and are advertised on the Airbnb platform will be subject to severe penalties if they do not have planning permission in place.
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If you do not have planning permission for short-term letting, and Airbnb activity is being carried out in your property, you risk being subjected to very serious penalties.
Insurance
What is the status of your insurance policy? Are you covered for Airbnb? What happens if one of the visitors has an accident in your property? If your property is in a multi-unit development and they fall in the common area and sue the management company, who is liable? I suspect it would hold you responsible on a number of issues. You have a significant exposure on this point alone.
Damage
What if your tenants do an Airbnb letting to a group who have a very rowdy and destructive social gathering which disturbs all the neighbours and destroys your property? A simple online search shows plenty of examples where this has occurred. Have you thought about your exposure at this point? I assure you, as the owner of the property you will be the point of redress for any affected party.
You have a very serious issue with your tenants who have left you seriously exposed on multiple fronts. They are taking commercial advantage of your property and no doubt, charging rents in excess of what you are receiving, which could leave you exposed to rent pressure zone regulations.
My first thought when reading your query was, this is a landlord who is happy receiving their rent but has a slight problem with an Airbnb letting. But the reality is that you have a major problem and accordingly, I would advise you to terminate their tenancy immediately. In order to do that, you will need to have proof that an Airbnb letting has taken place.
Kersten Mehl is a chartered residential agency surveyor and member of the Society of Chartered Surveyors Ireland
