Rental properties being used for Airbnb

Staff profile: Celica Olsson

A Victorian landlord, who unsuccessfully tried to evict tenants who advertised the home on Airbnb, had to take her fight all the way to the Supreme Court.
 
In what is thought to be the first authoritative case of its kind in Australia, the Victorian Civil and Administrative Tribunal (VCAT) dismissed the case of a landlord who tried to evict her tenants after finding out they had been using her property for Airbnb rentals.
 
Having been alerted to the fact that her property was being listed on the accommodation website by her tenants without her consent, the landlord tried to evict the tenants on the grounds that they were “assigning or subletting” the property.
 
Despite the tenants admitting they had agreed to rent out the apartment, VCAT determined that technically the tenants had not sublet their apartment, stating that “the nature of the legal relationship between the tenants and Airbnb guests was not a tenancy”. It was determined that by not granting the guests exclusive possession (that is, they could remove the guests if they wanted to) the renters were licensing the property, not leasing it.
 
The landlord appealed the VCAT decision by taking the matter to the Victorian Supreme Court and won the right to evict the tenants, ending a six-month legal battle. 
 
The Supreme Court overturned the VCAT ruling as it was successfully argued that listing an entire apartment was effectively leasing it (giving exclusive possession), thereby breaching the lease agreement (it is unknown what ruling would be given in relation to renting out just a room).  
 
Landlords wanting to limit the risks of having their investment properties used for Airbnb rentals without their consent, should seek legal advice and consider including specific conditions prohibiting tenants from subletting or using the property for Airbnb/other short-term accommodation in their lease agreements. 
 
From an insurance perspective, tenants renting out rooms could have implications for both their contents policy and the landlord’s insurance protections in respect to cover for theft/damage to property and public liability.
 
 
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