It's the question both tenants and landlords are asking - can tenants list their rental on Airbnb?

It is easy to understand the lure of Airbnb for property owners and tenants alike. Home owners can potentially earn two to three times the revenue that a standard annual tenancy could generate whereas tenants, subletting, can earn as much as $200 a night whilst on holiday or shacking up with a friend. 

These opportunities for earning windfall revenue have seen the growth in professional hosts – those who have listed multiple dwellings on Airbnb. The increase in 'professional hosts’ has in turn spawned the rise of the Airbnb start up. 

Amongst many, these include Tel Aviv start up, Guesty, a by-product of the industry. Guesty provides services such as housekeeping, keydrop and concierge facilities to professional hosts and currently boasts over 3000 listings. Another startup, Beyond Pricing, offers software which allows owners to vary rates based on supply and demand. Another, Airspruce links hosts with professional travel writers to pen alluring listing descriptions.

Inevitably, with this new era of accommodation booking, we see a new era of problems.

Landlords wishing to enter into traditional, long-term leases, have ample opportunity to vet  potential tenants in order to find the right one – someone who will pay the rent reliably, treat their investment property with respect and not hold wild parties. If the carefully selected tenant subsequently lists the property on Airbnb, owners are suddenly faced with a myriad of random guests, none of whom have been approved by the landlord. Increased wear and tear, potential damage and angry neighbours who did not bank on living next to a dosshouse are just some of the problems.

Can a landlord preclude a tenant from listing on Airbnb? Usually, yes. Most leases contain a clause specifying that a tenant cannot sublet without the written consent of the landlord, which cannot be unreasonably withheld. If a tenant lists on Airbnb without the landlord’s consent, they may be in breach of their lease and could face eviction.

Landlords are required to give consent to reasonable requests to sublet; however is a request to sublet on Airbnb reasonable? This question is yet to be considered by a court or tribunal.  We do know that a landlord cannot simply reject a request to sublet, they must give it reasonable consideration. To date, reasonable consideration has entailed, inter alia, requesting the financial or rental history of a potential subtenant or even an interview. This of course does not fit within the hotel like framework of an Airbnb reservation. It seems therefore that unless the law evolves, a landlord can refuse a tenant’s request to list a property on Airbnb.

In Australia, various tenant lobby groups are putting pressure on policy makers to review current laws and allow tenants, regardless of their lease, more flexibility to list on websites such as Airbnb. The UK has progressed even further and proposed legislative changes may see tenants given broad rights in relation to short term subleases.

The reality is that many tenants list on Airbnb despite a lack of written consent from their landlord. Stories abound of landlords perusing Airbnb only to find their own investment property listed for the world to rent.

Owners who want to list their properties on Airbnb are not free of hurdles either. Angry neighbours may object to the variety of colourful strangers an Airbnb listing can bring to their apartment building. Owners can temporarily take comfort in the fact that disgruntled neighbours have limited recourse; dirty looks and angry letters the best offence. Although the matter is currently being litigated, owners corporations of apartment buildings cannot rule to prevent owners or tenants from listing on Airbnb. This may change as lobby groups clamour for the government to regulate the area and give owners corporations the power to stop short-stay rentals and lock Airbnb out of some buildings for good.

The increased scrutiny of the accommodation giant is also prompted by the hotel industry. Authorities are being asked to consider why hotels are subject to stringent regulatory health and safety requirements, whilst adhoc Airbnb hotels operate entirely free of regulation. Hotels are faced with huge compliance costs including meeting building codes, fire safety requirements and disabled access. It seems incongruous that Airbnb can provide a hotel like service without being subject to any such regulation. The situation is not unlike the taxi industry’s war against Uber, who is now subject to some increased regulation.

The take home (excuse the pun) for both tenants and landlords is that when entering into a new lease, be clear from the outset as to what your intentions are. If you're an owner listing on Airbnb, respect your neighbours and try to weed out unsavoury tenants. This may include specifying no parties on your listing and giving your neighbours a number to contact you on should matters get out of hand. And hey, if you can't beat 'em, you may as well join 'em!

UPDATE - Please read the latest update in this matter here