Home sweet home
Have you heard of Air BnB? It’s a site for people to list, discover and book unique accommodation around the world - whether it’s a flat for the night, a castle for the week or villa for a month.
However, for landlords putting their property on the website it comes with hidden dangers, says Michael Labrum, senior partner at Labrums Solicitors.
In legal terms, this action is called subletting. Subletting (or subleasing) is defined as a tenant conveying the same rights that you conveyed to a third party for a shorter period of time.
In essence, they re-rent your property out for a few days or weeks for a specified fee.
As you can begin to imagine, subleasing can give rise to all sorts of issues. Who is coming and going? Are they convicted criminals? What liability will you have? Who has keys to the property and have they all been returned? What if they do not leave? What about the extra wear and tear? Who pays for the increased utility usage? The list could go on and on.
Smarter landlords do not allow subletting. They put a clause in their lease which specifically forbids it.
Michael said: “A client of ours decided to use the flat as an Air B&B rather than for his own use because he was primarily based in London and not in the flat. Essentially he rented it out.
“His landlord learnt of this and moved in and kicked the man out on the grounds that he was in breach of the tenancy agreement.
“Our client was not supposed to sub-let it or allow it to be used as anything other than his residence. This created a problem because he has now found himself homeless.
“It also created problems for the landlord who found himself in breach of the terms of his mortgage agreement because he was allowing it to be leased out for short term lets or days or weeks.
“Even in houses with a mortgage it would be a problem. A minimum tenancy agreement would normally be 6 months - not a few days or weeks.
“Something so simple turned out to be a problem on a number of different levels. If someone is considering a service such as Air B&B things like this need to be considered.
“These Air B&B deals are informal agreements rather than a legal ones.
“It’s the first time Labrums has ever got involved in a case concerning Air B&B, but it’s a growing market."
Labrums also does quite a lot of work with people who live abroad in places like South Africa and Mali who buy a flat or property for investments but don’t use them for residence themselves.
"I know of one case where an unscrupulous letting agent in London was sub letting out this property while the owner was working abroad without their knowledge.
"He came unstuck when the owner came back at short notice but the sub letters wouldn’t leave so the tenant came back to find his property being occupied by a family of six people."