Are you a landlord, tenant or lot owner subject to an Owners Corporation (formerly known as a ‘Body Corporate’)?
If so, it is important that you know your rights and obligations regarding the short-term letting of tenants. In other words, how can Airbnb – and other similar services – impact you?
The relevant legislation in Victoria that outlines the rights and obligations between landlords and tenants is the Residential Tenancies Act 1997 and Residential Tenancies Regulations 2008.
Under the Act and Regulations, a landlord can issue a Notice to Vacate to a tenant when a tenant has ‘sub-let’ or ‘subleased’ a premises without the landlord’s consent i.e. rented the premises to someone not on the lease. The issue, however, is whether a tenant renting a premises via services like Airbnb constitutes a ‘sublease’ or merely the granting of a ‘licence’.
The recent Supreme Court case of Swan v Uecker (2016) regarded a dispute between a landlord and a tenant, where the tenant was renting out an apartment to short-term guests via Airbnb. The landlord had applied to the VCAT for an order to evict the tenant and take possession of the apartment, on the basis that the tenant was subleasing the apartment without the landlord’s consent.
At first instance, the VCAT denied the landlord’s request, stating that the tenant had merely provided the Airbnb guests a licence to occupy the apartment, as opposed to a sublease, and therefore had not breached the tenancy agreement.
The landlord appealed the VCAT’s decision and the matter was referred to the Supreme Court. The Court confirmed the VCAT’s reasoning that a tenant providing a licence to Airbnb guests was not a breach of a tenancy agreement. However, upon a review of the relevant material, the Court found that the tenant had in fact provided a sublease to their Airbnb guests. The key factor to the Court in determining if an agreement was a sublease or merely a licence was whether it provided the guests exclusive possession to the apartment.
The VCAT’s order was overturned and the Court made an order for possession in the landlord’s favour. In doing so, the case provides a warning to tenants who seek to rent a premises via services such as Airbnb without the landlord’s consent.
You should contact our dispute resolution team on (03) 9311 8511 if you have an issue regarding a tenancy arrangement.