A precedent setting case: opening the gates for more landlords to win

Late last year, we were approached by a landlord who suspected their tenant was illegally sub-letting the apartment in Wellington’s CBD. Because of our success with Airbnb previously, we took over the management of the property, and began investigating.

Through a bit of teamwork we were able to confirm this was the case, and then contacted the tenant to address the issue. The tenant then stopped all rent payments and abandoned the apartment.

We lodged the sub-leasing breach, which has a specific clause stating “The tenant shall not assign or sublet the tenancy (including AirBnB and other temporary rentals platforms) without the landlords written consent”. With the Tenancy Tribunal earlier this month, we were successful in not only winning the case, but setting a precedent for future similar cases at the tribunal, by being awarded the profits earned by the tenant as well as damages.

The outcome has been a big win for landlords across New Zealand, as this is the first time that a landlord has been awarded the profits earned by the tenant illegally sub-leasing a rental property on Airbnb.  The Residential Tenancies Act doesn’t specifically allow for landlords to recover profits earned by a tenant through sub-leasing when it’s in breach of their Tenancy Agreement, and it’s understood that it has never been achieved, until now.

The news of our success broke this week, and we’ve had outstanding feedback and comments following the outcome of the case. It is certainly a game changer for how similar cases will be dealt with, and serves as a reminder for landlords to ensure their tenancy agreements specifically includes clauses around sub-letting.

For more information email me at keith@niceplace.co.nz

Nick Phillips