Tenants fined over Airbnb sublet

In what is believed to be the first ruling of its kind, a Wellington couple who sublet a rental property without its owner’s approval have been found to have breached the Residential Tenancies Act.

The couple, who sublet the property on Airbnb, were ordered to pay the owners $1000 for mental distress and exemplary damages of $300.

Wellington property manager Keith Powell lodged the case with the tribunal after the two tenants were discovered to have hosted seven groups at the property at a profit of $1568 in July and August last year.

In a decision made public yesterday, it was revealed the tribunal last month ruled in his favour and deemed the tenants’ actions breached both the act and the individual tenancy agreement.

In a document released to the Herald, the tribunal adjudicator said the act and the tenancy agreement both allow a tenant to sublet and assign a property unless “expressly prohibited”.

“It is clear that in this situation subleasing was expressly prohibited. The tenancy agreement specifically provides that, ‘The tenant shall not assign or sublet the tenancy without the landlord’s written consent’.”

The decision document outlined how the owners of the house had not given permission for it to be sublet as they were anxious at the potential mistreatment of their home by

[It was] heart-breaking to think that people could be so uncaring and disrespectful.

people they didn’t know.

Powell, the director of Nice Place Property Management, said that when the owners found out about the situation they cut their holiday short to come back and sort it out.

“They were quite over-wrought thinking that people had been living in their home that their property manager had not had the opportunity to vet and approve on their behalf.”

The owners told the tribunal it was “absolutely heart-breaking to think that people could be so uncaring and disrespectful of us and our things”.

Powell said it took them about 10 days to get the property back to the condition it was in when they left it.

He said the fine was not a big enough deterrent: “At the very least they should be required to pay the revenue back.”

However, the tribunal adjudicator said the breach was in a mid-high range and the $1000 was sufficient to cover the mental distress while also taking into consideration that the tenants ceased as soon as requested and that there was no lasting damage.

Powell had one message for tenants wanting to do things outside their rental agreement: “Get it in writing from your property manager, or don’t do it.”

Property management expert David Faulkner from RealiQ said there were serious insurance implications for landlords unaware their properties were on Airbnb.

“If serious damage does occur on the premises, insurance companies may not cover the damage as the property is not being used as a principal place of residence by the tenants.”

Property owners