South Auckland tenants who illegally sub-let a room in their home on global website Airbnb have been ordered to pay $1222.94 for breaching their rental agreement.
Landlords say they are considering adding a new rental agreement clause to specifically ban this sort of sub-letting.
Seng Lee and Serene Ong rented a home at 10 Glencullen Pl in the Auckland suburb of Dannemora from Sunrise Property Management Services but the Tenancy Tribunal said the owner "became aware through their insurance company that the tenants were operating an Airbnb business from the premises".
The owner contacted its agent, Iris Wai Lau of Sunrise, and voiced concerns, the tribunal said.
"The tenants do not dispute that they had signed up with Airbnb on March 22 2018 to host guests in a room at the property. The tenants' understanding was that because they were not making the whole of the premises available to guests, they were not sub-leasing and were therefore not in breach of their obligations to the landlord," the decision said.
But the tribunal said they had breached their tenancy agreement and the Residential Tenancies Act
A part of that law prohibits a tenant from assigning, subletting or otherwise parting with possession of the premises during the term of a tenancy without the landlord's consent.
It was not disputed that the Dannemora tenancy agreement expressly prohibited sub-leasing, stating: "The tenant shall not, without prior written consent from the landlord or property manager".
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The tenants were ordered to pay $1202.50 in compensation for the sub-lease breach and $20.44 to reimburse filing fees, a total of $1222.94.
However, they avoided being evicted from the property and the property manager's application for termination of their tenancy was dismissed.
The tenants took immediate steps to make sure no further bookings could be made.
The landlord and owner suffered loss as a result of the tenants' breach in several ways, the tribunal found, including strain and worry over what had happened, the breach of trust and deception by the tenants, loss of insurance cover and wear and tear on the premises from the unknown number of people living there from March 22 till June 7, the decision said.
Andrew King, NZ Property Investors Federation executive director, said it was hard to quantify how many rented properties were being wrongly sub-let but landlords were considering adding a specific clause to ban such practices and make it even clearer that this breached the law and agreement.
"There is a real risk for owners, especially that they can lose their insurance cover. There is also extra wear and tear on the property. It is interesting to note that the insurance company were the ones to alert the owner.
"We are looking into advising members to explicitly put in a clause preventing letting out all or part of the property so it is absolutely clear to tenants.
"If owners are in properties that are potentially more likely to be used as Airbnb accommodation, it is probably a good idea to go onto the site and others to check if their property is listed," King advised landlords.