By Bea Patel, TLE Property Editor and Director of Shop for an Agent
Landlords are being warned to look out for tenants who go away over the Christmas holidays and sublet their rental properties without consent.
Total Landlord Insurance has revealed a 14 per cent increase in the number of malicious and accidental damage claims received this year, as a direct result of illegal subletting, through holiday rental sites such as Airbnb.
Airbnb, synonymous with the ‘sharing economy’ has seen rapid growth throughout the UK, particularly in prime London locations. It now has an ever-increasing community of users.
Many travellers will use such sites to book accommodation for their break over the Christmas period – a high season for renting out property. Although most holiday rentals will be hosted responsibly, there will be cases where tenants sublet without the relevant permissions.
The ‘sharing economy’ provides expanded access to products and services, but it remains a highly unregulated part of business.
Eddie Hooker, CEO of Total Landlord Insurance, confirms that its popularity has presented new risks for homeowners and landlords. He said: “Whilst off on vacation themselves, tenants may consider subletting to earn extra easy income, but according to findings from the National Landlords Association (NLA), almost half of tenants who sublet their property do so without their landlord’s permission.
“Subletting can breach a landlords mortgage terms and also invalidate their existing insurance policy – so it’s vital for them to be aware of the problems it can present. An increasing number of landlords are suffering accidental and malicious damage to their properties, generating a rise in claims, because tenants have sublet to another tenant.”
And tenants are not the only culprits. There are examples of both landlords and tenants using Airbnb rentals as a complete business model, as short term lets can attract higher levels of rental income.
Airbnb has recently changed its terms and conditions to prevent properties from being offered for more than an aggregate 90 days in any one calendar year, unless relevant council permissions are obtained. The vast number of buy-to-let insurance policies insist that tenants are living at the property under assured shorthold tenancy agreements for genuine claims to be accepted.
Paul Shamplina, Brand Ambassador of Hamilton Fraser, parent company to Total Landlord Insurance, offers his advice to landlords. He comments: “Unfortunately, anyone can fall victim to a subletting scam so landlords make sure you’re on your guard over the next few weeks when tenants are more likely to be vacating your property. Although not entirely preventable, there are steps you can take to help avoid such situations and the risk of having a ‘bad tenant’ staying in the property. Be prepared and carry out property inspections to look out for tell-tale signs of subletting. Speak to the neighbours if you can. They can be on alert for anything suspicious, including a high volume of people coming and going from the property and/or excessive noise.
“Landlords who suspect their property has been sublet over the Christmas period should look at popular holiday websites to see if the property has been advertised. Most tenancy agreements include a clause that prevents subletting and, if this is the case, you should notify the original tenant of their breach of contract.”