15 November 2016

Airbnb and your tenancy agreement

A recent decision of the Supreme Court of Victoria has found in favour of a landlord who sought to terminate a residential tenancy because her tenants had been letting out the property on Airbnb without her consent.

At first instance, the application of the landlord to the Victorian Civil and Administrative Tribunal was dismissed.  The Tribunal found that the tenants were not ‘subletting’ the premises in breach of the lease, but merely granting a licence to occupy to Airbnb guests.  On appeal this decision was overturned with the Tribunal finding that the short term letting of the premises to Airbnb guests amounted to a sublease.  This was prohibited by the tenancy agreement unless the tenants obtained the landlord’s consent (which they had not).

Despite the Airbnb agreement referring to the occupancy of the guests as a mere licence, the court found that the tenants, through the Airbnb agreement with their guests, passed on the occupation of the premises with all its qualities (including exclusive possession) to the guests for the agreed period.

The court was careful to narrow the application of this decision to the present facts and made no ruling on the general legality of Airbnb agreements or similar factual scenarios.  For that reason landlords should consider inserting specific conditions prohibiting grants of licences to occupy as well as subletting if they are concerned about tenants utilising Airbnb for properties.

Read the full decision here.

Read the Sydney Morning Herald article here.


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