A recent decision in the Victorian Civil and Administrative Tribunal (VCAT) determined that the owner of an apartment in Melbourne was unable to evict their tenant for subletting their apartment through Airbnb, an online marketplace for listing vacation homes.
The landlord attempted to terminate the tenants lease earlier this year after becoming aware that the tenants were frequently allowing others to accommodate the premises.
VCAT’s decision was in favour of the tenants and found that Airbnb guests did not have exclusive possession of the property and therefore the agreement between the tenants was merely a licence to occupy as opposed to a lease.
The owner appealed the decision of VCAT to the Victorian Supreme Court arguing that on three occasions Airbnb guests had access to the entire apartment. The lawyers for the owner outlined that the factors considered by the tribunal lead them to determine that exclusive possession was not provided to the Airbnb guest however he stated that the tribunal had either identified the wrong legal test for exclusive possession or applied the test incorrectly. The opposing lawyers, acting for the tenant argued that the intention of Airbnb was that it would operate like a hotel booking, not as a sublease and therefore should be legally characterised as a licence rather than a sublease.
The judge held that the Airbnb agreement in issue of the appeal, for occupation of the whole apartment, constituted a lease. It was determined that by entering into the Airbnb agreement, the guests were sub-letting the apartment. The judge ordered the tenants to be evicted and possession of the apartment be returned to the owner.
The current legislation governing tenancy agreements is outdated and was put in place prior to sites such as Airbnb coming into existence. It is important to insert conditions into your residential leases to prevent the granting of licences to occupy and sub-leases without the prior express consent of the landlord. This will ensure your tenant is prevented from renting out your property without your permission, through such forums as Airbnb.
Most landlord insurance policies do not cover subleasing so you do not want to be caught in this predicament if your tenant is subleasing your property when damages to it occurs.
If the lease has been drafted to restrict house sharing arrangements and the tenant decides to sub-let the property without your consent, then you may issue a remedy to breach.
If you have any questions or would like to discuss your rights in relation to house sharing under your lease, please contact our office on 07 3876 5111. We offer a no obligation consultation for landlords.