Airbnb is fast becoming the preferred method of accommodation for leisure and business travellers. For Airbnb hosts, it can be an easy way of making some extra cash, especially if your property is awaiting new tenants or is on the market. But is it really that simple?
Recently, there have been a number of stories where guests have damaged properties, people have been injured at Airbnb homes and hosts have been left with a lot of clearing up to do.
Nicole Rogers, of DAS Law, answers the most important questions for existing Airbnb hosts and those thinking of letting their properties through the platform:
If your property or belongings are damaged or stolen, will your home and contents policy cover you?
The Truth About Using Airbnb to Let your Property
“It is unlikely, as the insurer will usually not have catered for paying guests when arranging the policy. The host would need to clarify with their insurer as to whether their cover would be sufficient to cover losses. Airbnb does offer a host guarantee, whereby the firm promises to reimburse hosts for damages of up to £600,000; the company adds that hosts should not consider this as a replacement for owner’s or renter’s home insurance.
“Whilst a host is not required to take out specific landlord insurance, it would be advisable to speak with a specialist broker or insurer to ensure sufficient protection.”
Could sharing your rental or leasehold property with Airbnb cost you your tenancy or home?
“Millions of Airbnb users may have unknowingly breached the terms of their leases, leaving them vulnerable to legal action or losing their tenancy.
“The vast majority of tenancy and leasehold agreements are likely to state that the property in question may only be used as a private residence. This would prevent tenants from renting out or sharing their flat or home for short periods. It should be considered by anyone letting their property out through Airbnb to check their tenancy or leasehold agreements first.
“It is not just those renting that should be wary of breaking contracts; mortgage companies may also take a dim view of homeowners offering short-term lettings of their property. It would be wise for owners to contact their mortgage company before offering their home out, as they may very well be breaking their mortgage contract. Whilst buy-to-let mortgages allow for assured short-term tenancies, short-term is often defined as six months; clearly Airbnb stays are considerably shorter than this.”
What are the tax implications for the income you receive?
“Money received from hosting is generally regarded as income; therefore, it is likely that Income Tax will be payable, so the host may need to declare their earnings to HM Revenue and Customs (HMRC). It is possible that a host may be entitled to certain tax reliefs or allowances, so it is advisable to take tax advice regarding this.”
What precautions do you need to take to comply with health and safety legislation?
“Hosts must ensure that the premises are reasonably safe for visitors. With regards to fire safety, landlords should inform visitors of a fire evacuation route. The Regulatory Reform (Fire Safety) Order 2005 makes landlords responsible for taking steps to protect the people using your premises from the risk of fire. This means that a host should carry out a fire risk assessment, if necessary, improve the fire safety measures and keep the risks, and fire safety measures, under review.
“If a visitor has suffered an injury at a host’s premises, he/she may seek to pursue a personal injury claim, particularly if the host has breached its duty of care to the visitor, which subsequently has caused foreseeable injury.”
As an Airbnb host, do you need to have public liability insurance?
“There is no legal obligation to take out public liability insurance to host via Airbnb. However, it would be worthwhile to do so in order to protect yourself, the host, in the event of an injury claim from the visitor.”
Before deciding to let a property via Airbnb, make sure you’re aware of your legal obligations and responsibilities – don’t get caught out!