By Pierce Bedogni - 25 May 2018
Recently, the Tenancy
Tribunal ruled that landlords can claim for the profits that a
tenant makes in illegally subleasing their rental premises,
especially for the purposes of an Airbnb rental. In this case, the
landlord discovered that his apartment had been rented out 46 times
over a six month period on Airbnb for approximately $249 per
night.
This was in breach of the tenancy agreement which prohibited
subleasing without the consent of the landlord. This term was
consistent with the landlord's rights under the Residential
Tenancies Act 1986.
Once the landlord discovered the breach, he informed his tenant
to cease renting the apartment on Airbnb. The tenant decided to
stop paying rent, abandon the premises and prevent access by
fitting a deadbolt.
In awarding the landlord its outstanding rental arrears, the
landlord was also awarded $2,150, being the net profit the tenant
made for the renting of the apartment on Airbnb. This was made as
an equitable claim for "account for profits" as the tenant was not
entitled to that profit.
As more properties are leased under Airbnb, it is likely that
this case will be used as a precedent for landlords to claim
illegitimate profits made by tenants.
However, it does raise issues over tenant privacy and taxation
issues, which require further discussion and resolution.
For further questions in relation to this article, contact Tony Johnson or
Pierce
Bedogni.
Tenancy
Tribunal Order: Nice Place Property Management Limited v Jeff
Walter Paterson