No matter how much you try, it’s impossible to control everything your tenants do with your property. A large portion of the risk involved in owning rental properties is that tenants are unpredictable.
One of the most problematic things tenants do is run an Airbnb business. Regardless of what’s in their lease, some tenants feel like they have the right to use the property however they wish.
Are you dealing with a tenant who hosts Airbnb guests without permission? If so, here’s what you need to know about this frustrating situation.
You’re liable to the city for your tenants’ actions
Even though your tenant is breaking the lease by hosting nightly guests through Airbnb, your city officials won’t care. In many cities, running an Airbnb business makes your property a short-term rental, which means you have to pay quarterly fees to the city just like hotels. If you don’t put a stop to it fast, you might end up with big fines. In Houston, specifically, fines can go up to $500 per day for violating short-term rental laws.
The requirements vary per city, but you can expect some or all of the following to apply:
- A business license
- A special permit
- Meet building and housing standards
- Comply with zoning rules
- Pay taxes
- Follow landlord-tenant laws with all guests
In the Houston area, there are plenty of rules to follow to make an Airbnb legal. For example, your property must meet all building and housing standards, you’ll have to pay a hotel occupancy tax, and you’ll need to comply with the Hotel and Motel Ordinance.
Say your property isn’t completely up to all housing standards, but your tenant doesn’t mind. Their Airbnb guests might take issue. If someone rents a room or the whole property long enough to be considered a tenant, those Airbnb guests can make it a legal problem for you.
Another major concern is that any Airbnb guest who becomes injured on your property can potentially sue you (and win). This is worse than property damage sometimes because some insurance policies are void when subleasing is involved.
If your tenant is subleasing through Airbnb without permission, don’t let the situation get too far out of hand before taking action. Your property is at risk.
Here are some tips for putting an end to this and preventing future incidents.
1. Specifically prohibit Airbnb in your lease
Put a clause in your lease that specifically prohibits tenants from subleasing the property in any way, including through Airbnb or other similar sites. Then, go over your lease terms with every tenant, in person, verbally, and explain this clause to them so they understand exactly what subleasing involves. Make sure they know that it is not permissible to even rent a spare bedroom to someone.
You should also differentiate between a regular house guest and a guest who pays to stay on the property. Your tenant will be less likely to break the lease when the consequences outweigh their potential for financial gain.
For instance, if the consequences involve being evicted, they won’t be likely to rent through Airbnb. So, make it clear that subleasing is an evictable lease violation.
If your tenant seems annoyed about this rule, you can always explain it to them in a way that highlights how it benefits them. For example, tell them there’s no way to know who the guests really are, and they could be criminals looking to do harm. Not allowing subletting is a way to protect your property, but it’s also for your tenant’s safety.
2. Check Airbnb periodically
If you suspect your property is being listed on Airbnb, but have no real proof, check the website once in a while. If your property comes up in results, take a screenshot and save the host’s profile information. You might even want to have someone you know inquire about the property so you can establish that it is, in fact, your tenant who created the listing and not some scammer.
3. Talk to your insurance company
You need to know if subleasing will void your insurance policy. Ask them what’s covered in the event that an Airbnb guest is involved in an issue, like an injury or property damage. You can also ask them for advice on mitigating the risk if a tenant starts subleasing your property.
4. Start the eviction process quickly
The first thing to do is send your tenant an official notice to stop subleasing immediately or they will face eviction. Send this letter quickly because it will be the foundation for an eviction lawsuit, should you need to file.
Unlike introducing new lease terms, which requires advanced notice, you can give your tenant 24 hours to quit or vacate in most cases. Just check with a Houston landlord-tenant attorney before sending your notice to make sure it’s solid.
Don’t wait to give your tenant this notice, even if you want to talk with them and see if you can convince them to stop with a simple conversation. Send them the notice and then talk to them about the situation.
Unauthorized subletting hurts your investments
There is no reason to allow subleasing. You don’t get to screen the people who stay in your property, and you also don’t profit. Allowing tenants to sublease is no different from allowing someone else to use your investment property to generate income for themselves while your foot the bill.
You need to know who is living in your rental property, regardless of how long they stay. You have a right to require all occupants to be screened, and when tenants use Airbnb, it strips you of that.
Tenants who list properties on Airbnb without permission can be a nightmare. You can avoid having to deal with this issue by hiring a property manager.
Green Residential property management
When you’re facing difficult situations as a landlord, our services can provide you with all the support you need. As one of Houston’s premiere property management companies, you’ll have peace of mind knowing your properties are in good hands.
For more information about our services, reach out to us today for a free property analysis; we’ll be happy to speak with you about how we can meet your needs.