Airbnb – Overnight success or a bad night’s sleep?

by Property 118

14:06 PM, 16th August 2017
About A year ago

Airbnb – Overnight success or a bad night’s sleep?

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Airbnb – Overnight success or a bad night’s sleep?

Airbnb is fast becoming the preferred method of accommodation amongst leisure and business travellers.  For Airbnb hosts it can be an easy way of making some extra cash.

However, recently there have been a number of cases where properties have been damaged by guests, sublet by tenants, people being injured at Airbnb properties and hosts left with a lot of clearing up to do.

Nicole Rogers from DAS Law answers the most important questions for existing Airbnb hosts and those thinking of renting out their properties.

Could sharing your rented or leasehold property with Airbnb cost you your tenancy or home?

Millions of Airbnb users may have unknowingly breached the terms of their leases, leaving them vulnerable to legal action or losing their tenancy.

The vast majority of tenancy and leasehold agreements are likely to state that the property in question may only be used as a private residence.  This would prevent tenants from renting out or ‘sharing’ their flat or home for short periods. It should be considered by anyone letting their property out through Airbnb to check their tenancy or leasehold agreements first.

It is not just those renting that should be wary of breaking contracts, mortgage companies may also take a dim view of home owners offering short term lettings of their property. It would be wise for owners to contact their mortgage company before offering their home out, as they may very well be breaking their mortgage contract. Whilst buy-to-let mortgages allow for assured short term tenancy, ‘short-term’ is often defined as 6 months; clearly Airbnb stays are considerably shorter than this.

What precautions do you need to take to comply with health and safety legislation?

Hosts must ensure that the premises are reasonably safe for visitors. With regards to fire safety, landlords should inform visitors of a fire evacuation route. The Regulatory Reform (Fire Safety) Order 2005 makes landlords responsible for taking steps to protect the people using your premises from the risk of fire. This means that a host should carry out a fire risk assessment, if necessary, improve the fire safety measures and keep the risks, and fire safety measures, under review.

If a visitor has suffered an injury at a host’s premises, he/she may seek to pursue a personal injury claim, particularly if the host has breached its duty of care to the visitor, which subsequently has caused foreseeable injury.

If your property or belongings are damaged or stolen, will your home and contents policy cover you?

It is unlikely as the insurer will usually not have catered for paying guests when arranging the policy. The host would need to clarify with their insurer as to whether their cover would be sufficient to cover losses.   Airbnb do offer a ‘host guarantee’ whereby the firm promises to reimburse hosts for damages of up to £600,000, the company adds that hosts should not consider this as a replacement for owners or renters home insurance.

Whilst a host is not required to take out specific landlord insurance, it would be advisable to speak with a specialist broker or insurer to ensure sufficient protection.

What are the tax implications for the income you receive?

Money received from hosting is generally regarded as income; therefore, it is likely that income tax will be payable so the host may need to declare their earnings to HMRC. It is possible that a host may be entitled to certain tax reliefs or allowances, so it is advisable to take tax advice regarding this.

As an Airbnb host, do you need to have public liability insurance?

There is no legal obligation to take out public liability insurance to host via Airbnb. However, it would be worthwhile to do so in order to protect yourself, the host in the event of an injury claim from the visitor.



Comments

Mandy Thomson

12:57 PM, 19th August 2017
About A year ago

The post above states, "The Regulatory Reform (Fire Safety) Order 2005 makes landlords responsible for taking steps to protect the people using your premises from the risk of fire. This means that a host should carry out a fire risk assessment" however, it's my understanding that the Act does require a fire assessment for individual residential units such as houses or flats let for occupation by a single household, as stated on the London Fire Brigade site: -
"The Order applies to virtually all buildings, places and structures other than individual private dwellings e.g. individual flats in a block or family homes"

A property which is normally used as someone's home, but is let out on occasion as holiday accommodation on a very short term basis would not normally require planning permission for change of use from single household residential to holiday accommodation. For example, in Greater London, flats or houses can be used as a holiday let for up 3 months a year before change of use is required.

All the different pieces of legislation around fire safety can be confusing, and following Grenfell, I would not be surprised to find the law is changed so fire assessments will be required for individual rental dwellings and I wouldn't argue against it.

Mike W

14:08 PM, 19th August 2017
About A year ago

Could anyone explain to me how anyone in the UK is doing serviced accommodation above board ? If the property is leasehold and/or mortgaged you are supposed to inform the freeholder/mortgage co. A standard BTL or residential mortgage won't suffice from what I understand. So I'm guessing the people renting out the 1000s of apartments on air bnb are just taking the risk of not being found out? They can't all own them outright.

Glenn Ackroyd

11:46 AM, 20th August 2017
About A year ago

Mike W - I agree with you which is why I've stayed away from these. Particularly as I have lots of Mortgage Express mortgages and they are looking for any breach as a reason to call in loans.

Also the planning aspect. Using these B & B's means a change of use, except for the London 3 month exemption which will also be floated.

The big hotel chains will be putting pressure on governments and banks by lobbying at increasing rates. They will be losing occupancy and in turn profit.

Mark Alexander

19:42 PM, 20th August 2017
About A year ago

Reply to the comment left by Mandy Thomson at 19/08/2017 - 12:57
If Fire risk assessments were mandatory for all dwellings, regardless of ownership or tenure, then I wouldn't be against it either. It must be a level playing field though, Councils, Housing associations and owner occupiers should not be exempt.

CP12's for instance should be applied to all dwellings or none at all.


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