Airbnb and holiday lettings: What to do with the staycation boom

Holiday home lettings and Airbnb bookings have surged in popularity recently with many holiday makers choosing to rent ‘homes’ rather than stay in a hotel. Recent news reports show that the number of Airbnb rooms listed in London has quadrupled in the last four years.

However, for many homeowners, letting their property can mean taking on additional risks with reports of properties being badly damaged by renters who have held ‘wild parties’, leaving hosts with huge repair and cleaning bills.

Bethan Mack, Solicitor at DAS Law, answers the most important questions for those thinking of tapping in to this growing market.

If my property or belongings are damaged or stolen, will my home and contents insurance cover me?

It is unlikely, as the insurer will not usually 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 ‘AirCover for Hosts’ whereby the firm provides hosts with $3 million in coverage for damage. However, the company adds that hosts should not consider this as a replacement for owners or renters home insurance.

While 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 ‘letting’ my rented or leasehold property with Airbnb or another site breach the terms of my lease?

Millions of Airbnb users may have unknowingly breached the terms of their leases, leaving them vulnerable to legal action or the loss of 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. Anyone letting their property out through Airbnb should therefore check their tenancy or leasehold agreements first.

It is not just those renting who 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 tenancy, ‘short-term’ is often defined as six months; clearly, Airbnb stays are considerably shorter than this.

What precautions do I 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, they must also provide a fire extinguisher, fire alarm and carbon monoxide detector.

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 and, if necessary, improve the fire safety measures while keeping the risks, and fire safety measures, under review.

From January 2023, there may be additional responsibilities on hosts in England whose properties are in buildings containing more than one home (depending on the height of the building). 

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 their duty of care to the visitor, which subsequently has caused foreseeable injury.

As an Airbnb host, do I need to have public liability insurance?

There is no legal obligation to take out public liability insurance to host via Airbnb. As part of their ‘AirCover for Hosts’ policy, it provides Hosts with $1 million of cover if a host is found legally responsible for injury or damage to belongings.