What to do if you suspect your rental is being sublet online

Airbnb can provide an extra supplement to cover costs of rent, or generate income – but it comes with risks and consequences.  With the holiday season approaching, and the growing use of Airbnb – we are seeing concerns in the property management industry, with property investors getting worried about their rentals being sublet online to people they don’t know.

It is difficult to manage, as these guests are staying in their home without having signed an agreement, or being thoroughly vetted. This is a large concern for property investors as their investment is at a higher risk, their insurance may not cover any damages.

Following our successful Tenancy Tribunal case earlier this year, we have been giving advice and recommendations on how to handle situations where tenants have been subletting properties without the landlord’s permission. Here are some recommendations to follow if you suspect your rental is being sublet online, and in breach of the tenancy agreement.
 

Find the evidence

If you’ve been told by someone that they have seen your property listed on Airbnb, or you just have a suspicion – collect the evidence before going ahead and making a claim. Do an online search of your property through a search engine (Google), as well as any online listing platforms (Airbnb) you are aware of. Take screenshots/photos of the listings, and note down any supporting details.

You also need to make sure that the tenant is actually in breach of the tenancy agreement and the Act, before going ahead and making a claim. Read your tenancy agreement thoroughly. You may only have clauses around subletting the whole property, which could allow for single rooms to be sublet.

Follow procedure

If you have found that the tenant is in breach of the tenancy agreement, and therefore the Residential Tenancies Act 1986 – issue them a 14-Day Written Notice Period allowing the tenants to remedy the breach, usually in the form of paying the revenue generated to the landlord. If they do not comply, you can then apply to the Tenancy Tribunal.

It is best to act fast as soon as you learn your tenants are subletting your property, so you can remedy the situation. If you aren’t sure what processes to follow, or need assistance with the situation – call in help from an experienced property manager.
 

How to prevent subletting in the first place

In your tenancy agreement, ensure you have a clause prohibiting the tenants to sublet rooms (if you choose) and the entire property. Section 44 (1) of the Residential Tenancies Act 1986 allows landlords to include a provision in the tenancy agreement prohibiting the tenant from subletting during the tenancy.

Ensure you also include in the tenancy agreement the maximum number of people that can reside in the property, as it may not be considered subletting under the Act if the tenant is still living in the property and subletting using Airbnb. This should be communicated to all tenants at the beginning of the tenancy to avoid confusion.

It is also important to have regular property inspections. This gives you a chance to check in on the property to make sure all conditions are being met – but it also shows your tenants that you are actively looking after the property.

 

It can seem daunting and confusing coming across a situation like this, especially as platforms become widely adopted and people are looking to make some money. If you feel like you are in a similar situation, and need help from someone with experience in dealing with tenancy agreement breaches – get in touch by email at keith@niceplace.co.nz, or by phone at 027 306 6009.

 
Bianca Stables