The online short-lets industry has become so big, that many landlords and tenants have considered this option to earn extra income. The likes of Airbnb, Booking.com, Expedia and HomeAway are now the primary way to book holiday accommodation for many people.
These websites hold themselves as electronic platforms and “information society service providers” and benefit from light touch regulation. However, they operate all over the world and local laws which are significantly different from country to country. When you rent or book your property with these platforms, this responsibility will usually fall on the host.
While you can post your property and book in minutes, you should still think about the legal relationship between you and your guests and your obligations towards landlords, freeholders and banks, because the platform won’t do it for you.
In light of the creation of a new trade body for professional hosts and property managers being launched, we examine some of the main legal issues potential “hosts” and “guests” should be aware of.
Planning and licences
In London, you may need a licence if you’re providing sleeping accommodation of any residential premises and
- the total number of nights exceeds 90 and
- that the landlord doesn’t pay Council tax.
If you are not in London, you should check the planning rules in your area.
If you have a lease
If you own a leasehold property on a long lease, you should check the terms of your lease before renting it out because it may prohibit subletting.
It’s important to follow the terms of your lease as any breach may result in forfeiture of the lease itself.
If you have a tenancy agreement
Most residential tenancy agreements prohibit subletting. As this could give your landlord a cause to serve you a section 8 eviction notice, we recommend seeking permission before subletting your property on either short or long-term basis. In some cases your landlord may be happy for you to sublet, but it’s always good to have their written consent first.
If you have a mortgage
If you have a mortgage you should check the terms of your mortgage deed. If you want to start subletting, your bank may have to change your terms to a Buy-to-let mortgage.
You may also consider the terms of any insurance policies you have and make sure your “guests” are also covered.
While Airbnb may describe you as a ‘host’ and your tenants/lodgers as ‘guests’ this doesn’t mean that the usual rules about occupation rights don’t apply. Read our previous blog on the importance of distinguishing between tenancies and licences to understand the difference between the two.
Yours and your guests rights and obligations in relation to exclusive possession and eviction will depend on whether you rent out a private room, a shared room or a whole property.
If you rent out a room in your own home while you are living there and share living accommodation with the guest, or if your guests are sharing but are not a couple (like a hostel) this will usually be a licence.
If you rent out a private room but you don’t live in the property this will usually be a tenancy and the occupier will have ‘exclusive occupation’ of the room. There are certain circumstances (for example, if you provide cleaning services) it could be a licence.
If you rent out your entire property, your guests will most probably have a tenancy and this also means they will have ‘exclusive occupation’ of the property for a certain period of time.
However, as above, if you also provide certain services such as cleaning or others and have a key to go into the property regularly, it could be a licence. You could also consider entering into a Holiday letting agreement to ensure you let out your holiday home in the correct way.
Remember that while you can easily find your next “guests” on an online platform, you should always consider the legal relationship you are creating, what obligations you’ll have and what rights guests will get.
Please note that the law in this area is changing quickly and this guidance may vary depending on whether you rent out an entire property or a spare room. There have already been calls to regulate the short-term let market.
Ask a lawyer if you have any questions about your legal obligations as a landlord, tenant, host or guest.