Tenants made $1568 unlawfully from Airbnb deal

[Perry]

Tenants made $1568 from Airbnb deal, fined $1300 for breaching rental agreement
6 March 2017

The Tenancy Tribunal has ruled in favour of Wellington-based property manager Keith Powell, that his two tenants had breached both the Residential Tenancies Act and the Tenancy Agreement for sub-leasing the property via Airbnb. But while the couple made $1568 from hosting guests, the Tribunal only awarded $1000 to the property owners for "mental distress", and exemplary damages of $300 as a deterrent from doing it in the future.

Poor, impecunious, down-trodden, precious tenants - they deserve to to keep some of their ill-gotten gains now, don't they?

[Wiz]

Airbnb - Tenants, it's not for you, says the TT

or so says the Tenancy Tribunal:

http://www.stuff.co.nz/business/90095618/airbnb-deal-breached-rental-agreement

Interesting, as it is becoming more and more prevalent.

I recall some discussion on here previously that some were taking a 'no harm, no foul' approach. Does make you wonder 'what if' though should the Airbnb guests burn the place down. The mind boggles...

[eri]

the message has been sent

but

it will needed to be amplified and repeated

[SpoolLyger]

Airbnb - questions as a tenant?

Hello,

I am a tenant who is currently renting out a spare bedroom in the residence that I am renting from through Airbnb, this is while I also reside on the premise. I have a question about the following situation,

Today there was a post on Stuff.co.nz about some tenants from Wellington being fined and orderd to repay Airbnb earnings to their landlord because they sub-let the residence in which they were signed into a 4 month fixed term contract for. They tried to break their fixed term contract because they had brought a new house. They were not able to break the contract but they tenants moved into their new house anyway. To cover the costs of the fixed term contract they were not able to get out of they sub-letting it via Airbnb to cover the costs. This of course breaks their contract which states they were not allowed to sub-let the property.

My question is over how the term "sub-letting" can be defined under New Zealand law. As per the New Zealand Tennacy Act, sub letting is defined as no longer residing in the residence you have a tenancy agreement over and allowing people not listed on the tenancy agreement to live there instead.

My scenario is that under my tennacy agreement it states that I am NOT allowed to sub-let either, but that I AM allowed up to 4 people living in the residence I am renting. In our situation only my partner and I are signees of the tenancy contract with our landlord.

I have approached my landlord multiple times, even at the time of signing the contract, asking them in writing (emails and texts that I still have) if I need to have all people living in the residence signed on the tenancy agreement. They never stated if I did or if I did not need to do this.

The property manager has been informed multiple times from me via texts that I have arranged new flatmates to live with us, and the landlord has never asked us to sign these new flatmates into the tennacy agreement, even going as far as saying in texts that he does not need to know about the other people living with us. So we no longer inform the landlord when flatmates move in or out.

Under the Tenancy Act it states that people living in a residence who are not signed on in the tenancy agreement but are living alongside people who are signed into the tenancy agreement are considered "flatmates" under law.

This being said, does this also mean that if I host one of the rooms in the residence that I am renting in on Airbnb while I live there, are the Airbnb guests considered "flatmates" as well or does it mean that I am sub-letting to them?

If it is deemed that the Airbnb guests are not "flatmates" and that I am actually sub-letting the room to them, how is that different from having my other flatmate who lives with me perminantly but is not on the tennacy agreement form? Especially after I have repeatly told my property manager about flatmates moving in and out and there has never been new tennacy agreement requested for those situations?

--------------

Main points,

1) Is renting a room out to an Airbnb guest considered sub-letting?
2) If yes to (1) how is having a perminant flatmate not signed on my tenancy agreement also not considered sub-letting?
3) If my tennacy agreement states I am allowed to have 4 people including me living in the residence, why isn't and Airbnb guest okay? They are in essence a temporary flatmate, just like any flatmate not signed on the tenancy agreement?

Thanks,

Spool

[sidinz]

I recall some discussion on here previously that some were taking a 'no harm, no foul' approach. Does make you wonder 'what if' though should the Airbnb guests burn the place down. The mind boggles...

If memory serves, that discussion was over a situation not covered in this decision: that of a resident tenant renting out a spare bedroom.
Very different scenarios.

In the one covered by this TT decision, the 'tenants' weren't living there and had handed the property over to randoms with no background checks and were subletting in the strictest sense.

In the other scenario, the tenant is there and presumably in a position to be able to supervise the guests. Not hugely different from a tenant getting in a long-term flatmate that the landlord has no say in (assuming the TA allows for another person). In fact, with a lower level of occupation, there may be less wear and tear? In this context, I think there are valid arguments both ways. Not so with the case in the news.

[Wayne]

If memory serves, that discussion was over a situation not covered in this decision: that of a resident tenant renting out a spare bedroom.
Very different scenarios.

In the one covered by this TT decision, the 'tenants' weren't living there and had handed the property over to randoms with no background checks and were subletting in the strictest sense.

In the other scenario, the tenant is there and presumably in a position to be able to supervise the guests. Not hugely different from a tenant getting in a long-term flatmate that the landlord has no say in (assuming the TA allows for another person). In fact, with a lower level of occupation, there may be less wear and tear? In this context, I think there are valid arguments both ways. Not so with the case in the news.

I agree that there is a huge differance between the two senarios.

[donna]

This may have been discussed in another thread - what's the Landlord liability should the AirBnB tenant damage the property? Is the damage still under an existing insurance cover or not?

cheers,

Donna

[SpoolLyger]

Still looking for advice and peoples thoughts on my situation,

In my tenancy agreement, it states that I am allowed 4 people to live in the townhouse with me. Yet they only have 2 of us signed onto the tenancy agreement. So there is leeway for 2 additional people that they are allowing us to have and full knowingly only signing two of us on the contract and how I have previously mentioned do not want to know about, or sign on the other flatmates living with me

The situation gets a bit more interesting when you start to question if I should be able to legally profit off having Airbnb guests living in the residence with me. On one hand, it states I am not allowed to sub-let and on the other hand, it states I'm allowed an additional two people living with me.

Technically speaking, I am not exactly profiting at the moment (yet) but we have been able to reduce our rent down from $400 a week for me and my partner, to a measly $50 a week by using the proceeds from Airbnb to cover our rental costs. I just do not know at which point it is breaking the law or breaking our tenancy agreement.

Because another scenario could as well be this,

---

Under New Zealand Residential Tenancy Agreement Act it clearly does not require all tenants to be signed into the Tenancy Agreement. Althought, this is only the case if the Landlord or Property Manager DO NOT write a rule specifically into the Tenancy Agreement stating that all occupants must be listed on the Tenancy Agreement that you sign. So the following then applies,

It’s important to know the difference between tenants and flatmates and how the Residential Tenancies Act may or may not apply to your situation.
‘Flatting’ is a term commonly used to describe a living arrangement where people share rented accommodation, regardless of whether they are a tenant, or a flatmate.


If one (or more) tenant signs the tenancy agreement and then allows you to share the flat, you are likely to be a flatmate. Flatmates are people who are living in the property but are not part of the tenancy agreement.


A flatmate lives with the person they pay rent to (ie the tenant). Flatmates are not responsible to the landlord for the rent and the state of the property. Instead they are responsible to the tenant for their share of the rent.

Source: tenancy.govt.nz/starting-a-tenancy/flatting/

The above description on the tenancy services website sounds an awful lot like sub-letting, but it is a general practice used in thousands of flats across the country.


So, nothing is stopping you from convincing a few not so smart people to live with you, not sign onto the tenancy agreement, be considered 'flatmates' under New Zealand Tenancy Law and pay rent equal to or more than it states on the tenancy agreement. Essentially letting you live rent free and make money on the top of it all legally? As long as the number of people living in the residence are equal to or less than what it states is allowed on the tenancy agreement.

---

So how is this different from having Airbnb people come stay with you while you are also living in the residence? In both cases, the tenant can make money out if it. Except that unfortunately Airbnb is currently getting a lot of attention, but the problem can happen legally already?

[flyernzl]

I would say not, as the insurance cover is for (longish) residential tenants operating under the aegis of the RTA.

Whereas AirBNB is short-term serviced rentals more akin to a motel.

Different rules apply e.g. GST liablity.