Opinion: If you're an Airbnb host, there are a number of legal potholes that can catch you out if you're not careful

 
Adam Osieke
Airbnb'S Value Estimated At $10 Billion After New Round Of Investments
Airbnb as it appears on a tablet (Source: Getty)

Airbnb is now a hugely popular online platform connecting would-be landlords (or “hosts”) with tenants (or “guests”). The site allows for the vetting of both hosts and guests through online reviews and provides hosts with insurance in case things go wrong. But that still leaves a number of legal snags, however, which can be easily overlooked. Here’s what to watch out for.

#1 Breach of the lease: “alienation”

The first and most obvious snag to look for is a section of your lease known as the “alienation covenant”. In most cases, this clause will impose a condition requiring you to obtain the landlord’s consent before subletting the property. Some leases go a step further though, and ban subletting altogether.

#2 Breach of the lease: permitted use

A less obvious snag is the potential breach of the “user covenant” in your lease. This point was recently considered in an important case, which found that if a lease contains a condition that the property should only be used as a private residence, it will be breached if the property is let for even a few days at a time.

#3 Breach of planning laws

If you live in the Greater London area and let your property on a short-term basis for more than 90 days in any one calendar year, you might find yourself under investigation by a planning enforcement officer. Why? Because you will be deemed to have changed the use of your property and that requires planning permission.

#4 Breach of lease: compliance with planning laws

After the planning enforcement officer, the next call you receive might be from your landlord, again, alleging another breach of the lease. Many residential leases obligate the tenant to comply with planning laws. If yours is one of them, the service of a planning enforcement notice could amount to an additional breach.

#5 Breach of mortgage conditions

If you have a mortgage, it is worth checking whether the deed contains a restriction on subletting. While longer tenancies of six months or more may be acceptable, some mortgage deeds prohibit subletting for short periods of time.

#6 Damage to neighbouring property

The Airbnb host guarantee only covers damage caused to your property. It does not extend to property you do not own or control, such as the common areas in flats, thereby leaving you at risk of a claim for damages if things go wrong.

What happens if I get caught out?

The worst case scenario is that the landlord terminates or “forfeits” your lease and you lose possession of your property. Although this is rare and the court will inevitably order the landlord to reinstate the lease if the relevant application (for “relief”) is made, it will usually only do so on the condition that you remedy the breaches of the lease and pay the landlord’s costs. Also, if you have a mortgage your lender will be unimpressed, to put it mildly, by the risk posed to its security.

How do I avoid these snags?

Obtain your landlord's permission, don't exceed the 90 day planning allowance and check the profile of your guest carefully on the Airbnb website. Don't be afraid to ask your guest for ID and proof of address as well. You wouldn't allow a tenant into your home for a year without knowing enough about them, so why make an exception for a weekend visitor?

Airbnb is completely transparent about the fact that you are responsible for each letting, so it is worth taking time to put your own checks and balances in place.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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