Commercial Property Blog

Legal Tips and Traps

I’m a tenant. Can I put the place that I rent on Airbnb?

Posted by Andrew Grima, Isabella Krstanovski on 2 Jun 2017

Short-term rental arrangements have taken the world by storm as they boast giving guests a memorable and authentic experience of the city they’re staying in. If you own a house or an apartment, Airbnb or other short-term letting platforms can be fairly straight forward to use however, if you’re a tenant who wishes to short-term let the premises that you’re occupying, the waters become a lot muddier – as evident in a recent Supreme Court decision and Appeal in Victoria where a tenant hosted Airbnb guests without the consent of the landlord.

How does short-term letting work?

Airbnb, Stayz and other similar platforms work by allowing hosts that own a premises to rent or lease it to a visitor for a short-term stay. The platform receives a commission of the fees. 

Recent Decision:

Swan v Uecker (2017) ANZ ConvR 17-056

Facts

The Applicant, the landlord, owned an apartment which was rented to the Respondents. The tenants used the Airbnb platform to make the apartment available for guests to stay for a minimum of three days or a maximum of five days – despite the fact that the lease stipulated that landlord consent was needed before subletting or parting with possession the apartment. 

Issues

The case hinged on whether the Airbnb arrangement was in fact a ‘sublease’ or alternatively, just a ‘licence’ to occupy the apartment. To determine this, consideration was made as to whether the guests had exclusive possession of the premises during their stay. In the first instance, the court found that the Airbnb guests had a ‘licence’ as opposed to a sublease and therefore, there was no breach of the lease as they didn’t need the landlord’s consent. 

Appeal decision

The landlord appealed the decision on the basis that the Tribunal failed to thoroughly consider some of the more specific details around whether the arrangement was a ‘licence’ or a ‘sublease’. After further consideration, the appeal was granted and the tenant was found to be in breach of the lease. The court reasoned that whilst the stay was only for a short period of time, the occupancy was the same as sublease as guests had exclusive possession of the premises during their stay. 

Implications and conclusion

This decision demonstrates the complexities tenants can have in regards to short-term letting platforms when they don’t own the property in question. It is therefore important for both landlords and tenants to examine the relevant provisions of their lease and to keep the possibility of short term letting in mind when signing future leases. 

If you have any questions about subleasing a property that you are renting, or about a property that you own being subleased, please contact: