Airbnb is one of those Eureka! ideas that make you kick yourself for not having thought of it first. It makes complete sense, why have a
spare room sitting around doing nothing when you can make a good side income out of it? After all, we live in a sharing economy that is increasingly
divorced from traditional economic models and embraces social entrepreneurship. And in that spirit, we cannot fault tenants for hosting Airbnb
guests in rental properties especially if these arrangements put tenants in a more advantageous financial position to service the rent. That
said, it is worth taking pause and consider the impact on you as a landlord when your property is being used as an Airbnb. The recent Tribunal order* concerning
the legality of Airbnb sublet serves to illustrate some of the issues:
THE FACTS
The case concerns a fully furnished Wellington rental property that was leased out to the tenants by Nice Place Property Management Limited (NPPM) on a
fixed term tenancy (4 months). The tenancy agreement (“the Agreement”) expressly prohibits the tenants from subletting or assigning the tenancy
without the landlords’ written consent. After having purchased their own property, the tenants requested and was denied, early termination (by
a month). To alleviate the financial burden of servicing both the mortgage and the rent, the tenants leased the entire property (including chattels)
to Airbnb guests without the landlord’s knowledge nor permission. The Airbnb guests had sole and exclusive use of the property during their stay
all the while the tenants continued to pay the rent to the landlord.
THE ISSUES
With respect to the matter of the rental property being used as an Airbnb, the adjudicator considered the following issues:
- Were the...
