MAJOR RULING ON AIRBNB SUBLEASING

For the first time in New Zealand, a landlord has successfully been awarded the profits earned by a tenant for illegally sub-leasing a rental property on Airbnb.

The tenant had leased a Bellagio Apartment in Wellington on over 50 occasions over a 6-month period, making over $12,450 in revenue.

In the Residential Tenancies Act, no specific clause allows landlords to recover profits earned by a tenant through sub-leasing.

Keith Powell of Nice Place Property Management began managing the apartment when the owner first suspected the property was being sub-leased.

When Powell contacted the tenant regarding the sub-leasing, the tenant stopped paying rent and abandoned the apartment.

“It’s unusual to see the Tenancy Agreement explicitly state that sub-leasing on Airbnb is prohibited. So, finding that in just 6-months the tenant had done so on at least 54 separate occasions, missed rent, installed a deadbolt on the door and then disappeared, you’ve got to wonder what was going on,” said Mr Powell.

Shehan Gunatunga of Morrison Kent Lawyers believes the ruling will potentially set a precedent in court in favour of landlords.

“Being able to recover the profits from the sub-leasing activity sets a precedent, meaning there is now a legal basis for seeking that the profits be paid to an aggrieved landlord where a tenant sublets their rental property in breach of the tenancy agreement. This adds another layer of protection in situations of sub-leasing, which is becoming much easier for tenants to do,” said Mr Gunatunga.