The Phenomenon that is Air BnB
Last week on 2 of the training courses, the topic of subletting came up. We all understand what the term means and it is clear that subletting, in the true legal sense, is a challenge to manage, and sometimes prove.
To add to the landlords' burden, we should now be on the look-out for "Air BnB". In case you are not aware of what this means, here is a quick overview.
Air BnB was a concept of 3 American guys in San Francisco who were struggling to pay their rent, so they came up with the idea that they could "rent" out a room and provide breakfast to strangers.
Fast-foward 8 years and the company is worth £25 billion. It sounds great. One of the founders said it was "The worst idea ever, that ever worked.
So how does this juggernaut of a company impact you? You may have stayed in an "Air BnB" apartment or house - its cheaper than a hotel - but... the properties listed on the site (download the App) may be tenanted by one of your tenants who is making money by advertising a room or in some cases, the whole property. And there the problem lies. If one of your properties is being used to "host" a traveller from New York and an issue arises - accident , maintenance problem, or worse - your tenant will without doubt not be insured and your landlord's insurance may be rendered nul and void.
Across the Globe, the authorities are tackling "Air BnB". Why? Because is it a "business" - if yes, who is paying tax? Is it a BnB or Hotel? If yes, which legislation applies. In San Francisco, "hosts" are being fined $1,000.00 if they do not register with the City Council; in Berlin, anyone renting out more than half of their home for less than two months without a permit will be fined £90,000.00. Our local authorities are catching up quickly and so are mortgage lenders, some of whom will not permit Air BnB.
When you carry out your property inspections be vigilant, also remember that checking the Air BnB app may uncover some unwanted surprises.