Airbnb phenomenon is a growing issue for landlords

by Paul Shamplina

8:41 AM, 19th April 2016
About 3 years ago

Airbnb phenomenon is a growing issue for landlords

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Airbnb phenomenon is a growing issue for landlords

Airbnb model poses a growing threat to landlords. Over the last 12 months, the number of cases Landlord Action has received, where tenants have sub-let properties without their landlord’s permission, has trebled. Aside from breach of tenancy agreement and additional wear and tear to the property, landlords are left exposed to being in breach of their mortgage terms and buildings insurance.airbnb

The share economy is a growing phenomenon, with models such as Airbnb giving people a platform to view themselves as a business. Unfortunately, it is also enabling those who do not have the right to do so, from profiting from someone else’s asset. The problem is due to be highlighted by one landlord’s ordeal on the Channel Five programme ‘Nightmare Tenants, Slum Landlords’, Wednesday 20th April at 9pm.

The episode will show Joy Philips, a landlord who decided to let out her West London home so she could afford to take time out to volunteer at an orphanage in Africa. Joy thought she had found the perfect tenant in a young doctor who wanted her home for a three year lease. It all seemed very promising until she started receiving emails and calls from her neighbours complaining about the volume of people coming and going at her house.

Joy was shocked to discover that her house was not being used as a home for the young doctor, but being rented out room by room as a boutique hotel on the Airbnb website. Making thousands over the rent being paid to Joy, her tenant was breaking the no sub-letting clause in her contract. By having so many people in the house, Joy’s home insurance was also at risk of being void. Joy was forced to give up her volunteer work in Africa to return to the UK and call Landlord Action as eviction specialists in the hope of getting her property back.

I highlighted my reservations surrounding Airbnb in an interview with Richard Quest on CNN.

We have had concerns for some time now regarding the protection of properties which are being uploaded and offered as holiday lets via Airbnb.

We continue to receive a growing number of instructions from landlords who want us to start possession proceedings against tenants who have sub-let their property via Airbnb without consent. Whilst Airbnb do provide a level of protection for hosts, naturally certain conditions and limitations do apply. My concern is that there is not enough safeguarding with regards to obtaining proof from the individual who is advertising the property that they are the legitimate owner. Or, if they are a tenant, that they have consent from their landlord to rent out the property in this way.

We have seen cases where, quite clearly, tenants are making thousands of pounds from exploiting the service to a high volume of holiday makers on a weekly basis. In a recent case, it was thought that more than 300 people stayed in a landlord’s property in one year, unbeknown to the landlord. As well as damage to properties, landlords have received complaints from block managers with regards to being in breach of their head lease and unhappy neighbours in relation to anti-social behaviour, and that’s before considering issues regarding HMO licensing and possible invalidation of insurance and mortgage terms.

This is a growing trend which needs to be stamped out as soon as possible. It’s extremely important that if landlords start to receive complaints, especially if they have never had any such trouble in the past, that they carry out an inspection of the property to ensure it is not being used in this way without permission.

Landlord Action logoWatch Joy Philips battle to regain possession of her property in ‘Nightmare Tenants, Slum Landlords’ this Wednesday 20h April on Channel 5 at 9pm.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

Neil Patterson

9:17 AM, 19th April 2016
About 3 years ago

Definitely worth watching this on Wednesday 🙂

We have had a few readers I know of on P118 that this has caused a problem for. Even if you discount all the other issues as Paul says it would probably invalidate your insurance which is absolute worse case scenario if the property burns down !

Sunny K

9:43 AM, 19th April 2016
About 3 years ago

The issue is endemic now in London. Apart from Airbnb, I believe the professional single/couple short to medium term tenants are also moving towards rent by room rather than flats. HMO seems to be future now on this niche market.

David Lawrenson

11:21 AM, 19th April 2016
About 3 years ago

AirBnB - what a business!

Like hotels and landlording but with no checks at all, no regs, nothing.
Utterly ludicrous - and not much fun if you live in a block that is being actively AirBnBd.

See our article on this:
http://www.lettingfocus.com/blogs/2016/03/airbnb-threat-to-private-landlords-and-communities/

What does the government think it is doing to allow this type of business to flourish whilst real hotels and the PRS is clobbered by all sorts of rules and regs.

Gilly

15:33 PM, 19th April 2016
About 3 years ago

Recently there was talk of not allowing landlords to ban subletting in AST contracts. This seems to have died down, but it shows the complete lack of understanding by the government on the issues surrounding housing law, which you have all mentioned. (In Wales an HMO is 3 or more people, so a 2 bed flat can quickly become illegal, well, unlicensed, if a tenant sublets the second room to a couple for example).

The worst aspect of Airbnb is that the government are encouraging this by specifying a tax free allowance of £1000. Presumably this will come out of the wear and tear allowance we have lost and the increase in stamp duty and loss of mortgage interest tax relief. Do they want a private sector? I don't think so. They want everyone to share their homes, whether they own them or not. Do these people have to register as landlords for RentsmartWales I wonder? (rhetorical, I know I know).

Alison King

17:45 PM, 19th April 2016
About 3 years ago

This whole area is a nightmare of contradictions. On the one hand the government are encouraging rent-a-room and airBnB because of high levels of under-occupancy which is thought to be a contributory factor in the housing shortage; but on the other hand, councils are clamping down on HMO conversions because the neighbours complain of too many people going in and out.
It's all crazy.

John Walker

18:02 PM, 20th April 2016
About 3 years ago

On housing legislation the present government doesn't know its a**e from its elbow.
Unfortunately we do not appear to have a viable alternative for whom to vote next time round. A case of a pox on all their houses.


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