In a time of economic uncertainty people are looking to supplement their income by either taking a second job or setting up a small business. One way for people to supplement their income which is becoming increasingly popular is Airbnb.
Airbnb is a short term rentals website where people can rent out their property or a room in their property on a short term basis. It seems like a simple way to make extra money particularly when you can have a £1,000 tax break if you make money out of property or trading. However there are considerable risks to take into account.
If you own your home it may be a condition of your mortgage that you must not let out your property. If you breach a term of your mortgage agreement your mortgage lender is entitled to take possession of the property and may issue possession proceedings against you. They may also require you to repay the mortgage in full immediately.
If you own a leasehold property there may be conditions in your lease which prevent you from subletting or running a business from the property. A breach of your lease could result in the free holder applying for possession of the property.
If you own a property and intend to let it out for more than 90 days in a year you may require planning permission. Meaning that home owners may be in breach of planning laws
You may also be invalidating your home insurance if you sublet your property. You should have a business insurance policy if you intend to let your property through sites like Airbnb. If your policy is invalidated it will mean that you cannot make any claims on it even if they are unrelated to Airbnb.
If you rent a property through either a private or social landlord, local authority or housing association your tenancy agreement will probably prevent you from sub-letting or running a business from your property. A breach of your tenancy agreement can lead to possession proceedings.
A landlord of a rented property is also at risk if their tenant sub-lets. If the sub-let makes the property into a Housing of Multiple Occupation (HMO) a landlord could be fined up to £20,000 by the local authority for not being licenced. A property becomes an HMO if at least 5 people live in more than one household over 3 or more storeys.
Stephensons has a specialist housing law team who can provide assistance if you find yourself in difficulty with your landlord or mortgage lender. If you require assistance please call 0175 321 6399.